What To Know About Medicare Enrollment For 2020
By Maura Schauss, CFP® and Todd Youngdahl, CFP®
Planning for your healthcare costs in retirement is one of the most important moves you can make. Most people receive healthcare coverage through their employers, which will end when they retire. Many are eligible to receive Medicare at age 65, so there are things you need to know to be ready to enroll, including the enrollment process, coverage options, and what healthcare expenses Medicare doesn’t cover.
You are eligible to enroll in Medicare when you turn 65, beginning three months before your birthday until three months after you turn 65. If you don’t sign up during your initial enrollment period, you can also enroll during Medicare’s annual enrollment period at the start of each calendar year, though your coverage won’t begin until July. Note that you’ll be automatically enrolled when you turn 65 if you’re already collecting Social Security retirement benefits. Consider beginning to explore your Medicare options when you turn 64, so you don’t rush your decision when it’s time to enroll.
Four Parts to Medicare Coverage
- Medicare Part A: Also known as hospital insurance, Medicare Part A covers inpatient hospital care and some nursing care coverage. You’re eligible to receive this coverage for free if you paid Medicare payroll taxes throughout your career for at least 40 quarters, or 10 years.
- Medicare Part B: Part B is medical insurance coverage for some medical conditions and preventative care. You will pay a monthly premium for Part B coverage. Together, Parts A and B are known as “Original Medicare.”
- Medicare Part C: Known as the Medicare Advantage Plan, or Medicare Health Plan, this is private health insurance that may cover prescription drugs, dental care, or eye care, depending on which plan you choose.
- Medicare Part D: This is another private insurance option and covers prescription drugs.
The Medicare website provides detailed information on how to enroll and your plan options and offers ways to speak with counselors. Though you don’t need to re-enroll every year, you should review your coverage annually to ensure it still fits your needs, especially if your health has changed.
Which Medicare options are best for you depends heavily on your personal situation, including access to any retiree healthcare plans or work plans if you’re still employed, your retirement savings and expenses, and the health of you and your spouse.
It’s important to be aware of what the various parts of Medicare don’t cover. Original Medicare (Parts A and B) doesn’t cover dental care, eye exams, prescription drugs, or physical exams. For most of us, that means obtaining supplemental coverage through Part C to avoid incurring costly out-of-pocket expenses. Also, long-term care is generally not covered by any Medicare option. Because many of us will need some type of long-term care, especially as we age, we counsel clients to plan for the possible costs of home healthcare or a nursing home stay when readying for retirement.
Enrolling in Medicare is just one of the critical retirement moves you’ll have to make. Retirement planning is just one of our areas of expertise. If you need assistance, please schedule a call or Zoom with us.
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Washington Wealth Advisors is a Fee-Only registered investment advisory firm serving busy families, executives, women building wealth and small business owners. We provide Wealth Advisory Services – financial planning coupled with asset management – guided by a personalized investment strategy based on each client’s unique goals. Our unbiased advice, independent approach and proactive investment management helps to support our client’s overall financial peace of mind.