Make the Right Medicare Choices
Everyone becomes eligible for Medicare when they turn age 65. You must enroll when you are first eligible otherwise you will pay late-enrollment penalties. You can change your plan choices on an annual basis during the open enrollment period (October 15th – December 7th).
Important terms you need to know:
Part A – is provided by Medicare. It only pays for hospital bills.
Part B – is provided by Medicare. It pays for doctor’s visits, outpatient care, physical therapy and other services. If you are still working and you have private health insurance coverage, you can choose to opt out of Part B.
Part A and Part B do not cover all of your medical-related costs. To help cover the out-of-pocket costs, it is recommended that you purchase a Medicare Supplement Plan (Medigap). These plans are available through private insurance companies. Medigap plans do not cover long-term care, dental care, vision care, hearing aids or private-duty nursing. There are 10 different Medigap plan options to choose from (Plan A through H). Choosing the right option for you is a critical planning decision. Work with a specialist who can help you make the right decision.
Part D – is provided by private insurance companies. It pays for prescription drugs.
Part C (Medicare Advantage Plans) – are provided by private insurance companies. These are optional plans that can take the place of Part A, Part B and Part D.
If you understand Medicare and take the time to research all the options, you can find a plan that meets your unique healthcare needs.
Resources: medicare.gov, medicaredrugsavings.org, shiptacenter.org (state health insurance assistance programs website). Try to work with a CFP professional to help you coordinate all aspects of your financial plan.
Key information to know: Medicare stops at the US border. If you plan to travel abroad it is critical that you purchase travel insurance to cover any unforeseen medical issues that occur while you are out of the country. A policy for a 65 year old couple from Travel Insurance International included $1 million of medical evacuation coverage and $100,000 of medical coverage per person with no deductible. It also included trip cancellation coverage, trip interruption coverage and lost luggage protection – cost was $800 for a 2-week European trip. A medical only policy was around $400.