As if planning for retirement isn’t hard enough – like figuring out when best to retire and when to take social security – you also need to watch your health and have the right health care plan. In this regard, before you turn 65 there are some essential decisions you need to make. One of the most important is Medicare.
What is Medicare
Medicare is a federal program that provides health insurance to retired people regardless of their medical condition. There are four parts to Medicare that can help you pay for expenses:
- Medicare Part A: Hospital Insurance
- Medicare Part B: Medical Insurance
- Medicare Part C: Medicare Advantage
- Medicare Part D: Prescription Drug Coverage
Medicare covers many services, but not everything. There are some procedures and services (like long-term care) that are not covered by Medicare insurance (learn more). In such cases, some people purchase Medigap Insurance, which is private insurance that covers what Medicare does not.
What to do when you retire.
To avoid penalties and any delay in coverage, here’s when you should sign up:
- Part B: Three months before your 65th birthday.
- Part D: sign up as soon as you become eligible for Medicare. According to The Reader’s Digest, there’s a bit of a window and it can be affected by other decisions. They report, “Sign up when you’re first eligible for Medicare—during the three months before your 65th birthday, the month of your birthday, or the three months after— or within 63 days of stopping another Medicare, employer, or retiree drug plan. Waiting will result in higher premiums— an extra 32 cents for every month you went without coverage.”
- Medigap Insurance: there is a six month open enrollment period once you are 65 or older (and enroll in Part B). If you miss this window, you could ultimately be turned down or premiums could increase.
If you have questions about Medicare, please see the government’s website for answers. AARP also has a starter kit that takes you through the steps you need to know.
Filed under: Investing, Planning Tagged: female, Investing, male, men, planning, Prudential, research, results, retirement, saving, Savings, study, women