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Turning 65 can be an exciting time if you are making your retirement and travel plans. After years of hard work, you finally you get to enjoy the fruits of your labor! It also means it’s time to start thinking about Medicare, which can bring anxiety and confusion. Whether you’re hanging up the nine-to-five hat for good or simply transitioning off another medical insurance plan, here’s an overview of the What, When and How of Medicare to bring some peace and confidence in the next stage of healthcare.

 

What is Medicare?

Medicare is a federal health insurance plan for those 65 and older and is divided into four parts.

  • Medicare Part A (Hospital Insurance) covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care and is available at no cost for most people.
  • Medicare Part B (Medical Insurance) covers certain doctors’ services, outpatient care, medical supplies, and preventive services and has an income-based cost. Parts A and B together are also called “Original Medicare” and is an 80/20 plan, meaning the government pays 80% of covered expenses and you pay the remaining 20%. It should be noted that this 20% is uncapped.
  • Medicare Part D (Prescription Drug Coverage) adds prescription drug coverage to Original Medicare through plans offered by Medicare-approved insurance companies. Many Medicare Advantage Plans also include similar prescription drug coverage.
  • Medicare Supplement plans (Medigap) are offered by private insurance carriers to help Original Medicare participants cover copayments, coinsurance, and deductibles. Though these supplemental policies are federally standardized, costs can vary from carrier to carrier.
  • Medicare Advantage plans (also called Medicare Part C) are bundled alternatives to Original Medicare offered by private companies that contract with Medicare. They usually include parts A, B and D. If you have a Medicare Advantage plan, it is illegal for anyone to sell you a Medigap plan unless you will be switching to Original Medicare.

So, how do you choose between Original Medicare and Medicare Advantage? It’s highly dependent on your specific situation and should be discussed with a qualified Medicare insurance professional.

 

When should I start thinking about Medicare?

First, find out if your company offers a retirement medical plan. If so, ask for a summary of benefits and costs and you will have the first step tackled.

Start forming your plan at least three months before you turn 65. This gives you plenty of time to learn about options and decide if you plan to enroll directly in parts A and B, if you’ll need part D prescription drug coverage, or if you’ll bundle with a Medicare Advantage plan instead.

When you’re first eligible, you have a 7-month enrollment period that begins 3 months before you turn 65, includes the month you turn 65, and ends 3 months after you turn 65.

Consulting a Medicare-specialized insurance professional can be very helpful as you navigate these waters. We’re always happy to provide a recommendation!

 

How do I enroll in Medicare?

There are several ways to tackle this, depending on your plan. Again, we suggest working with a local insurance professional who is certified and specializes in Medicare. They can guide you through your options for plans, networks, drug coverage, travel coverage and answer your questions around Medicare. They can also help with enrollment at no cost to you.

If you prefer to tackle it on your own, here’s a brief guide.

  • Medicare Part A is automatically available at age 65 and does not require enrollment.
  • Medicare Part B requires enrollment and should be considered when you are retiring or otherwise leaving a group or individual health insurance plan. Some people are enrolled automatically while others must sign up, usually depending on if you’re receiving Social Security benefits. Enrollment in Part B can be done by:
  • Medicare Part D, Medicare Supplements, and Medicare Advantage options can be reviewed and enrolled with the help of a local insurance professional. Or, if you prefer, you can review and enroll in your local plans directly on gov.

Medicare can be daunting and the marketing in your mailbox alone can be overwhelming. In case we haven’t made it clear enough, working with the right Medicare insurance professional can help avoid common mistakes and arrive at a plan tailored to your needs. Don’t hesitate to ask for help along the way because, with the right education and professional team, you’ll make it through enrollment and sail smoothly into this next phase of life!

Alterra Advisors - Josh Whelan

Josh Whelan

CFP®, CLU®, ChFC®
Partner, Financial Advisor

About the Author

Josh sees his profession as a calling, not just a career. His motive for pursing financial planning was very personal. While working on a degree in marriage and family counseling, Josh’s father was diagnosed with multiple sclerosis. Josh decided then and there to change career paths to help his family prepare for an uncertain financial future. Financial planning became his path to serving others.

Josh applies his passion for personal relationships and helping people thrive as a financial steward. His “listen first” approach seeks to understand his clients’ true financial goals and then offer the open communication and guidance needed to reach those goals.

A native of the Pacific Northwest and a graduate of Seattle Pacific University, Josh serves many kinds of clients, but has established a niche helping dentists integrate their personal and practice finances. He’s also a regular lecturer at the University of Washington School of Dentistry, helping the school integrate financial education into the curriculum.

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.