Since July is Medicare’s birthday month, there is no better time to discuss what Medicare is and how it may benefit you. At its core, Medicare is a federal health insurance program for Americans who are ages 65 and older and younger people with disabilities. Here are key points to know about Medicare:
What Does Medicare Cover?
Medicare Part A pays for hospital costs while Part B covers doctor visits. Medicare Part D offers coverage for prescription drugs. After you enroll in Medicare Part A or Part B, you may replace them with Medicare Advantage. This private health insurance plan that usually includes Part D and additional benefits you won’t have through Medicare Part A or B, like dental and vision benefits.
You may want to supplement Medicare Part A or Part B with a Medigap plan. If you choose a Medigap insurance plan, Part A and Part B will cover most of your out-of-pocket costs, while the Medigap insurance plan will take care of your coinsurance and deductible.
How Do I Sign Up for Medicare?
If you receive Social Security benefits when you turn age 65, you'll automatically enroll in Medicare Part A and Part B. If you would like Medicare Part D or prescription drug coverage, you'll have to enroll on your own as it's not automatic.
In the event you do not receive Social Security benefits but qualify for Medicare, you may enroll online via the Social Security Administration website. You will need to enroll three months before your 65th birthday month, during your birthday month, or three months after your birthday month.
Keep in mind that you do not have to sign up for Medicare if you continue to work or have other health coverage before turning age 65.
Medicare and Retirement Planning
It’s essential to consider your healthcare options in retirement, including Medicare, and plan for remaining medical costs. You will need to determine whether you will use Medicare Part A and Part B or select a Medicare Advantage Plan. If you opt for Part A and Part B, you will have to decide if it makes sense to you to purchase other Medigap insurance.
While most people do not pay a premium for Part A, Part B, or Medicare Advantage, Medigap often comes with premiums, copayments, coinsurance, and deductibles that can quickly add up.
Understanding your options before you enroll in any Medicare plan and evaluating potential medical costs during your retirement, you may be able to avoid medical expenses that can deplete your retirement savings.
Consult Your Financial Professional
A financial professional can help you navigate Medicare and design a plan for your healthcare expenses in retirement. Contact them today.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
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