Provided by Sara Frank-Hepfer
When you turn 65, you become eligible for Medicare. If you are currently receiving social security benefits, you will be enrolled automatically. If you are not currently receiving social security benefits, you need to sign up for Medicare as soon as you are eligible in order to avoid penalties.
When to sign up
To help ensure that your benefits become effective as soon as you are eligible, enroll in Medicare three months before you turn 65. If you don’t sign up for Part A and/or Part B when you are first eligible, you can enroll between January 1 and March 31 every year, but you may pay a penalty for late enrollment. Once enrolled, your coverage will begin on July 1.
If you are currently covered by group insurance through your employer or your spouse’s employer, you may be able to delay enrolling in Medicare. If you or your spouse continues to work and you elect to remain on employer-provided group insurance, you have eight months after your employment ends to avoid the penalty for late enrollment. Remember that the clock starts ticking when your employment ends, not when your health insurance ends. Keep in mind, COBRA does not count as employer-provided group insurance. Talk to your employer (or your spouse’s employer) about how your group plan coordinates with Medicare.
Your Medicare options
Medicare Part A is free for most people, but it covers only inpatient hospital expenses. Medicare Part B (doctor and outpatient visits) and Medicare Part D (prescription drug costs) are optional and have separate premiums and deductibles.
Medicare Advantage plans (also called Medicare Part C) are offered by private Medicare-approved companies as an alternative to traditional Medicare. These plans include the same coverage as Medicare Parts A, B, and D and may cover some dental care, hearing aids, or eye care services for an additional cost.
A Medicare Supplement Insurance policy, also called Medigap, is optional coverage available from private insurance companies. It helps cover deductibles and co-payments. It may also cover health care provided outside the U.S. You do not need a Medigap policy if you enroll in a Medicare Advantage plan.
Medicare provides very limited coverage for long-term care expenses for chronic illness or disability. A separate long-term care insurance policy may give you more control over your options, help you live independently, and (in some states) allow you to protect your children’s inheritance. Please note: There are several optional insurance plans that are designed to supplement Medicare coverage.
When choosing a Medicare option, check with your doctor to determine whether he or she accepts your coverage or is part of your plan’s network. You may also want to check whether your benefits will follow you if you move to or live part-time in another state.
Your choice is not irrevocable. You can change your Medicare health insurance or prescription drug plan options at the end of each year. Your new choice will be effective for the following year.
For more information about your Medicare choices, visit www.medicare.gov; download the official U.S. government Medicare handbook, Medicare & You, from http://www.medicare.gov/Pubs/pdf/10050.pdf; and read Medicare’s publication, Choosing a Medigap Policy, available at https://www.medicare.gov/pubs/pdf/02110.pdf. If you prefer, you can call 800.MEDICARE (800.633.4227) to obtain more information.
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.
Sara Frank-Hepfer is a financial consultant located at Financial Technology, Inc., 1500 Abbot Road, Suite 150, East Lansing, MI, 48823. She offers securities as a Registered Representative of Commonwealth Financial Network®, Member FINRA/SIPC. She can be reached at (517) 351-8600 or at frank@financialtec.com.
© 2015 Commonwealth Financial Network®
This was printed in the December 27, 2015 – January 9, 2016 edition.
