As many of you know, turning 65 means you’re now eligible for Medicare. It’s a complex program and delaying your enrollment can result in penalties. Before you embark on the enrollment process, we encourage you to review the following six points. They’re intended to help you gain a fundamental understanding of the program and the types of decisions you will need to make.
#1. There are two ways to get coverage: You can choose Original Medicare, which is offered by the federal government. It includes Part A (hospitalization) and Part B (medical coverage). Alternatively, you can select Medicare Advantage, which is offered by private companies. This is referred to as Part C. A number of the Medicare Advantage plans include Part D (prescription drug coverage) and other benefits.
#2. Expect to pay for a portion of your costs: Neither Original Medicare nor Medicare Advantage pays for all of your medical expenses. You will be responsible for premiums as well as an array of out-of-pocket expenses such as co-payments and deductibles.
#3. There are ways to protect yourself from high out-of-pocket costs: Medicare Advantage offers caps on your out-of-pocket expenses. If you choose Original Medicare, then a supplemental insurance policy, sold by a private company, can help cover out-of-pocket expenses associated with Original Medicare.
#4. Two ways exist for drug coverage: As noted in the first point, many Medicare Advantage plans offer Part D coverage. However, if you choose Original Medicare, you can purchase a standalone Part D plan. Private insurance companies offer these types of plans.
#5. Plan options exist: Medicare Advantage plans and prescription drug plans vary in terms of benefits and costs. So, if you choose to pursue this route, it’s important to compare plans with your needs. Medicare Supplemental plans are standardized across the nation, except in three states: Wisconsin, Massachusetts, and Minnesota.
#6. Timing of enrollment is important: Your initial enrollment period is seven months long. This period includes your birthday month, plus three months before and after. If you receive disability benefits, then it is the 25th month of receiving them.
It’s essential to have the right type of insurance for your medical needs. Given the complexity and choices surrounding Medicare, we encourage you to take the time understand your options and reach out to us for help. Our advisors at Wealth Dimensions can guide you through the process and help you make choices for medical coverage that will best meet your needs.
For informational purposes only. Not intended as legal or investment advice or a recommendation of any particular security or strategy. Information prepared from third-party sources is believed to be reliable though its accuracy is not guaranteed. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. For more information about Wealth Dimensions, including our Form ADV Part 2A Brochure, please visit adviserinfo.sec.gov or contact us at 513-554-6000.