Turning 65 marks a major life transition into retirement. It also makes you eligible for Medicare, the federal health insurance program. With strategic planning, you can maximize your Medicare benefits and minimize out-of-pocket costs. Here are some of the things to understand in order to maximize your Medicare health benefits.
Understand Medicare Coverage Options for Retirees
To maximize the health benefits of Medicare, you need to understand how the whole program works. In a nutshell, there are a few different paths to take for Medicare coverage at age 65 if you’re getting started:
Original Medicare consists of Part A (hospital insurance) and Part B (medical insurance). Part A covers inpatient services or medical expenses and usually has no premium if you have a 10+ year work history and social security. Part B covers doctor visits and outpatient care and has a standard monthly premium.
Medicare Advantage (Part C) plans are offered by private insurers to provide all your Part A and B benefits. Many include Part D drug coverage and extra benefits like dental or vision. Provider networks are more limited than Original Medicare.
Prescription drug coverage (Part D) is only available as a standalone plan added to Original Medicare or bundled within Medicare Advantage Plans. Compare plans annually.
Medigap policies help pay Original Medicare out-of-pocket costs like copays and deductibles. Plans are standardized across insurers and work nationwide with any provider accepting Medicare. You cannot have both Medigap and Medicare Advantage.
Enrollment Period for Original Medicare and Others
Wondering what’s sign process is for Medicare at age 65? It’s crucial to understand Medicare enrollment timelines to avoid lifelong penalties:
- Initial Enrollment Period – Enroll 3 months before turning 65, month of your 65th birthday, and 3 months after. You can sign up for any part of Medicare during this 7-month window.
- Open Enrollment – Make changes to your Medicare Advantage or Part D drug plan every year between October 15-December 7 for coverage effective January 1.
- General Enrollment – Sign up for Part A and/or Part B from January 1 to March 31 each year if you missed your initial window. Coverage starts July 1.
- Special Enrollment – Change to Original Medicare from a Medicare Advantage Plan from January 1 to March 31. Can also get Part B without penalty after losing employer coverage.
Coordinate With Work Insurance
If you are still working at 65 with health insurance from your employer (or spouse’s), you can delay certain parts of Medicare without penalty:
- For large employers (20+ workers), you can delay all parts of Medicare. The employer plan stays primary.
- For small employers, get premium-free Part A when first eligible but delay Part B until you lose coverage to avoid the premium.
Check with your benefits administrator on how Medicare will coordinate with the employer plan.
Compare Medigap vs Medicare Advantage Premiums
Two common ways to provide comprehensive coverage with Original Medicare are Medigap and Medicare Advantage. Here is how they differ:
- Medigap pays for Medicare deductibles, copays and coinsurance but typically has higher premiums. Gives you freedom to see any Medicare provider.
- Medicare Advantage usually has lower premiums or healthcare costs but you must see in-network providers. Copays or coinsurance is charged for services. Offers extra benefits.
- Medigap Plans are standardized while Medicare Advantage benefits can vary. Weigh premium costs against predictability.
- Shop carefully during your Medigap open enrollment period when insurers cannot deny or surcharge you for pre-existing conditions.
Look Into Prescription Drug Coverage Savings
Compare Medicare Part D prescription drug options every year during open enrollment. Here are tips to save:
- Pick a plan that covers your medications with affordable copays and coinsurance. Formularies can change.
- Consider a prescription drug plan with preferred pharmacies where you regularly fill prescriptions.
- Make sure the plan has a pharmacy network in the places you frequent – at home and when traveling.
- Inquire about extra savings programs for specific conditions or low-income subsidies if you qualify.
- Always opt for generic versions when available. You will pay higher costs for brand name drugs.
Protect Yourself With Long-Term Care Planning
One major coverage gap in Medicare is long-term custodial care. Medicare does not pay for assisted living or nursing home care long-term. Here are options to prepare:
- Purchase long-term care insurance by age 65 for the best rates. This will cover a portion of long-term care, especially when you retire costs.
- Consider a life insurance policy that includes a long-term rider to help pay future expenses.
- Ask if your state has a Partnership policy that protects assets even when Medicaid pays for care.
- Look into home health care agencies that take Medicare health plan when skilled care is needed periodically.
Manage Health Proactively
The best way to maximize your Medicare benefits is to stay healthy and minimize the need for high-cost medical interventions. Be proactive:
- Focus on disease prevention, screening tests, and early diagnosis to treat conditions quickly before they worsen. Ask your doctor about recommendations for your age and health profile.
- As a retiree, adopt lifestyle habits that reduce your risk of costly chronic illnesses down the road. Follow a Mediterranean style diet, exercise regularly, don’t smoke, limit alcohol intake, and control blood pressure and cholesterol.
- Take medications as prescribed and consistently follow up on your care plan. Coordinate closely between all your providers to manage complex health conditions successfully. Whether sing or you’re 65-year-old couple, take care of your health.
Planning ahead and optimizing your Medicare health coverage options will help protect your health and savings in your retirement years. Work closely with a knowledgeable insurance agent or health benefits counselor to determine the right individualized strategy.