Medicare
The age 65 milestone is one that has often become synonymous with retirement. Why? Because this is the time when individuals are eligible for the United States’ version of universal healthcare - Medicare. In other words, health insurance coverage just got more affordable. Unfortunately, those lower costs come with a tradeoff – more complexity. In this blog series we aim to teach you the basics of Part A, Part B, and Part D, overview what a Medigap supplement plan is, and help you understand the key differences between Original Medicare and Advantage Plans.
To learn more about the ins and outs of Medicare, please choose from one of our many blog posts below:
Before we dive into the main components of this article, which is Health Savings Accounts (HSA) and Medicare, let’s do a brief primer on how these types of accounts operate. HSAs are tax deferred savings vehicles that allow contributions to go in tax-free, and for withdrawals to be taken out tax-free – as long as the money is used to pay for qualified medical expenses. Therefore, HSAs are truly the only triple tax savings accounts allowed by the IRS.
You will encounter many important dates and deadlines once you peer into the world of Medicare and you will want to attend to these matters earlier than later – each day 11,000 people turn 65 and “get in line” to sign up for benefits. We hope this article will help you stay on top of things and have a smooth experience signing up for Medicare.
While private health insurance plans have been a part of Medicare since the mid 1960’s, they didn’t become what they are today until the Balanced Budget Act of 1997 and the introduction of Medicare+Choice that eventually was named Medicare Advantage in 2003. Medicare Advantage was designed to give recipients an alternative to “Traditional” Medicare. As of 2021, 42% of the Medicare population is enrolled in Medicare Advantage.
We know that government programs – such as Medicare and all the parts that come with it, including Medigap plans – are as straight-forward as a ball of spaghetti. We hope that you find our insights helpful as you plan out your medical expenses during retirement.
IRMAA is an acronym that is otherwise known as the Income-Related Monthly Adjusted Amount. This is a surcharge that gets added to your Medicare Part B and Part D base level premiums. Just what you wanted to hear… You have to pay more for the same level of coverage – only because you make more income. Effectively this is means-testing within the Medicare system.
If you opt to go with Traditional Medicare, you will need to purchase a Part D plan to have coverage for prescription medications. You may not need a Part D plan if you choose to go with Medicare Advantage instead; as most advantage plans include Part D already, but make sure to consider the limitations of Advantage plans before making your choice.
For those who have been covered by group insurance for all their working years, transitioning to Traditional Medicare’s Part B can be a little confusing as there are nuances about Part B enrollments, costs, etc. that should be understood BEFORE you turn 65. We hope to explain some of those nuances here.
With the second installment of our Medicare blog series, this article will be overviewing Medicare Part A, commonly referred to as hospitalization coverage. Note that there are many components to Medicare, and some of those components are intertwined. So, if you are interested in getting the full picture, we suggest you refer to our Medicare blog series page to keep up with the details you need.
Medicare: The United States’ version of universal healthcare for individuals aged 65 and older. Eligibility is a milestone that many retirees are excited to reach. Why? For those who retired prior to age 65, it often means lower costs or more comprehensive benefits. Unfortunately, regardless of age it’s usually also a rude awakening to the complex world of healthcare choices.