Published On: December 2, 2020
Written by: Ben Atwater and Matt Malick
Last week, amid continuing political drama and the massive coronavirus spike, we wrote you about Health Savings Accounts (HSAs). Today, in our third installment of our healthcare series, we will focus on the basics of Medicare.
Medicare is vital for Americans after age 65. Knowing the basics of Medicare is important not only for seniors, but also for their children – and even their grandchildren – as relatives often need assistance navigating the system.
Whether you are approaching Medicare age, currently enrolled in Medicare, or simply looking for more information to help friends and family, we believe this information will be useful to you.
Americans qualify for Medicare at age 65. You must enroll in Medicare beginning in the three months before your 65th birthday, the month of your birthday or the three months following your birthday. If you do not sign-up for Medicare during this window, you will face a lifetime penalty on your premium.
However, if you are still employed and your employer provides your insurance, then the lifetime penalty likely will not apply and you can probably wait to sign-up for Medicare, but we will discuss Medicare and work in a more detailed note next week.
Medicare Part A:
Medicare Part B:
* Plans F and G also offer a high-deductible option in some states. With this option, you must pay for Medicare-covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of $2,340 in 2020 ($2,370 in 2021) before your policy pays anything. (Plans C and F are not available to people who were newly eligible for Medicare on or after January 1, 2020.)
** For Plans K and L, after you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.
*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that do not result in inpatient admission.
Medicare Part C:
Medicare Part D:
Even for the wealthy, healthcare is an important aspect of retirement planning.
Under current law, clients over 65 years of age can rely on Medicare to cover most of their doctor and hospital expenses. Over one’s lifetime, the premiums, deductibles and co-pays for Medicare will add-up, but Medicare offers relatively comprehensive coverage at affordable prices.
Fidelity estimates a couple living into their 90s will spend $280,000 in healthcare expenses during their retirement, mostly on Medicare and associated premiums. This amount is in today’s dollars and not adjusted for inflation.
If you need assistance selecting your Medigap, Part D, or your Part C, we can offer you a trusted referral.
Additionally, the Medicare website is incredibly well organized and offers a great resource: http://www.medicare.gov/.
Finally, online Medicare applications are available at http://www.ssa.gov/medicare/.