5 Medicare Questions Answered!

by | Mar 20, 2024 | Financial Planning, Insights, Insurance Planning, Retirement Planning | 0 comments

Medicare, our national healthcare program for seniors, often comes with questions and confusion. But as a crucial part of your retirement plan, it’s important to understand how to use your benefits, one of our 8 Steps to Get Ready to Retire! If you find yourself confused about how Medicare works, here are the answers to five common questions.

1. How do I enroll in Medicare?

At age 65, you’re automatically enrolled in Medicare if you’re receiving Social Security or Railroad Retirement Board benefits. If not, you need to sign up with Social Security, which can be done online, by phone, or in person, starting three months before your 65th birthday​​. See our Guide to Enrolling in Medicare for more!

2. Do I need Medicare if I work past 65?

While you can delay Part A without penalties if you have employer coverage, enrolling in Part A might still be beneficial if it’s premium-free. For Part B, you might face penalties if you don’t have creditable coverage and delay enrollment​​.

A conversation with a qualified Medicare professional can help you choose the best course.

3. What’s the difference between Medicare Advantage and Medigap?

Medicare Advantage plans, or Part C, are an alternative to Original Medicare (Parts A and B), often including extra benefits like dental and vision, but usually with network restrictions. Medigap, or Medicare Supplement Insurance, helps cover costs Original Medicare doesn’t, like copayments and deductibles, without additional benefits but also without network restrictions​.

Because of the overwhelming number of plans and options, we recommend working with a Medicare professional to choose and enroll in the right plan for you.

4. How much does Medicare cost?

In 2024, the standard Part B premium is $174.70 per month. Part A is usually premium-free if you’ve worked at least 40 quarters in your lifetime. However, if your income is above a certain limit, you might have to pay an Income-Related Monthly Adjustment Amount (IRMAA), an additional charge added to your Part B and Part D premiums determined by your tax return from two years prior. For instance, if you and your spouse’s combined income is over $206,000, your Part B premium could be $244.60. Click here for a full IRMAA table.

Costs for Part C (Medicare Advantage) and Part D (prescription drug coverage) vary by plan​​.

5. Does Medicare cover prescription medications?

Original Medicare doesn’t cover most prescriptions; you’ll need Part D for drug coverage. Some Medicare Advantage plans include drug coverage. You’ll need to sign up for Part A or Part B before you enroll in Part D.

Answers to more common questions can be found at Medicare FAQ. If you need guidance, help enrolling, or a professional to help selecting the right plan, we’re always glad to provide recommendations!

Alterra Advisors - Josh Whelan

Ryan Colis

Partner, Financial Advisor

About the Author

Ryan is a problem solver. He has a distinct ability to create a simple solution for very complex puzzles. So, naturally, he’s an integral part of our team. His favorite part of his role at Alterra is the analysis – whether analyzing a financial plan or reviewing an investment portfolio. However, the profession allows him to share that passion with clients by helping them navigate financial complexities as they collaborate on achieving their personal and financial goals.

After completing his undergraduate degree in Business Management, Ryan and Grant met by chance, developed a rapport and have been working together ever since. Ryan has continued his formal training in finance by earning his CFP and CFA designations.

The “Alterra” name was coined by joining the Latin roots “alter”, the origin of the word “altruism” with “terra” meaning earth or land. This name reflects the company philosophy of “clients before profits” and providing firmly grounded advice.

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