What You Need to Know About Medicare

Louis DeCuir |

Since July is Medicare’s birthday month, there’s no better time to discuss what Medicare is and how it may benefit you. At its core, Medicare is a federal health insurance program for Americans ages 65 and older and younger people with disabilities. Here are some questions and answers regarding Medicare:

What Does Medicare Cover?

Medicare Part A pays for hospital costs while Medicare Part B covers doctor visits. Medicare Part D offers coverage for prescription drugs. After you enroll in Medicare Part A or Part B, you may replace them with Medicare Advantage. This private health insurance plan usually includes Part D and additional perks you won’t find in 0riginal Medicare like dental and vision benefits. 

You may also choose to supplement Medicare Part A or Part B with a Medicare Supplement or Medigap insurance plan. If you select a Medigap plan, Part A and Part B will cover most of your out-of-pocket cost but Medigap will take care of your coinsurance and deductible. 

How Do I Sign Up for Medicare?

If you receive Social Security retirement benefits, you will automatically enroll in Medicare Part A and Part B. If you would like Medicare Part D or prescription drug coverage, you’ll have to enroll on your own since it is not automatic enrollment. 

If you don't receive Social Security benefits but qualify for Medicare, you may enroll online via the Social Security Administration website. You will need to enroll three months before your 65th birthday month, during your birthday month, or three months after your birthday month. 

Keep in mind that if you continue to work or have other healthcare coverage, you do not have to sign up for Medicare at age 65. 

Medicare and Retirement Planning

It’s essential to consider your healthcare options in retirement, including Medicare. You will need to determine whether you will use Medicare Part A and Part B or go with a Medicare Advantage Plan. If you opt for Part A and Part B, determine if it makes sense for you to invest in Medigap insurance. 

While most people do not pay a premium for Part A, Part B, or Medicare Advantage, Medigap often comes with premiums, copayments, coinsurance, and deductibles that can quickly add up.

Understand your options before enrolling in any Medicare plan by evaluating the potential medical costs during your retirement. You may be able to avoid hefty medical expenses that take a toll on your savings by assessing your options and pre-planning. 

Consult Your Financial Professional

A financial professional can help you navigate Medicare and design a plan to cover your healthcare expenses in retirement. Contact your financial professional today.