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Learning a Little About Medicare

January 30th, 2020 at 07:52 pm

HR hosted a Medicare webinar this week that all colleagues were invited to attend. Though I’m a decade away from Medicare, I’m not knowledgeable about it and it’s an aspect of retirement planning I should consider. So I attended. I was surprised at how few people attended and I think I was the youngest one. The person presenting the information was not from the company but from an organization that offers Medicare consulting services. The positive aspect of that is that she knew the topic inside & out. The negative aspect is that she was presenting an informational seminar to sell their services, so it was clearly in her best interest to make the topic complex and to be biased toward over-insuring.

The seminar was informative and I did glean some information for my planning purposes.

As to the components and their costs, I took these notes:
Part A – covers inpatient hospital & hospice care. $0 premium. $1408/occurrence deductible + co-pays after 60 days
Part B – covers doctors & medical services. $145 - $492/mo/pp premium depending upon income (rolling 2-year look-back). $198 deductible, then 20% coinsurance. Covers Part A deductible.
Part C – supplemental medical insurance. 2 types & various choices. ~$160/mo/pp premium.
Part D – prescription drugs. ~$33/mo/pp premium. $435 deductible.

Enrollment is not automatic and the initial enrollment period is 7 months long – 3 months before the birthday month, the birthday month, and 3 months afterward. After that there are forever-penalties that are tacked on to the premium if you enroll late in a component that has a premium.

It’s not a high deductible plan so you can’t contribute to an HSA any longer but you can use funds from an existing one to pay expenses including the costs of the premiums for Part B or D and some Part Cs.

Based on my knowledge of Medicare now and my personal values, I plan to take these actions:
(1) Enroll in Medicare just before my 65th birthday
(2) Make sure our income keeps us at the base premium level for Part B, beginning the year DH turns 63.
(3) Skip parts C, D and plan to spend that money on health-promoting activities instead.

Is there anyone using Medicare now that has tips or gotchas for the rest of us to know for planning?

Posted in Retirement, Health | 5 Comments »

5 Responses to “Learning a Little About Medicare”

  1. AnotherReader Says:
    January 30th, 2020 at 08:49 pm 1580417372
    1580417372

    Some of the information you have is not correct. For example. if you do not initially enroll in Part D, the prescription drug plan, there is also a penalty for late enrollment. It is common to buy the buy the least expensive plan if you take no or a couple of inexpensive drugs. You can change your drug plan annually during open enrollment.

    Part C is Medicare Advantage. Medicare Advantage is in lieu of original Medicare and includes the drug plan. These plans have low premiums, but can have high out of pocket costs and often come with very limited networks. The insurance company dictates what care you will receive. It's very difficult to go back to original Medicare after being on an Advantage plan.

    Everyone should study their Medicare options before signing up. Insurance agents have incentives to put people in Medicare Advantage plans so you may be pushed into signing up for one by an agent. Do your homework!

  2. LifeBalance Says:
    January 30th, 2020 at 09:26 pm 1580419611
    1580419611

    AR, thanks so much for that feedback!

  3. LifeBalance Says:
    January 31st, 2020 at 01:25 am 1580433927
    1580433927

    Wow, good information Davera! Thank you.

  4. Dido Says:
    January 31st, 2020 at 06:22 pm 1580494926
    1580494926

    Also keep in mind that your initial choices may constrain later choices. Some people think that a Medicare Advantage plan (Part C) sounds good when they first sign up at 65...but then they reach their late 70s or 80s and they find that the coverage is not as good, or constrained to a local network. Then they want Part B & D and a Medigap (supplemental) plan but they either might not be able to get it or it would be more cost-prohibitive at that point. You have a long time to learn--and the rules may change during that time--keep on learning and remember that you should regard the decision you make regarding Part B, D and Medigap vs Part C as a permanent one, since prohibitive costs once you really want B/D/Medigap may make it so. Make the decision for your ailing 86-year old self. Like all insurance, once you really NEED it, you will not be able to GET it! Insurance is about risk-management IN ADVANCE; waiting until you need it is too late!

  5. Jenn Says:
    January 31st, 2020 at 11:04 pm 1580511850
    1580511850

    That's good advice Dido. I'll make sure to be as informed as I can be by the time I have to make decisions.

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