Health care will likely be your biggest expense in retirement and fortunately there’s still Medicare to help.
It’s important to watch your enrollment timing. You’re eligible for Medicare at 65 and you’re automatically enrolled if you’re already getting Social Security. Otherwise, you have to sign up somewhere between the 3 months before the month of your 65th birthday, and 3 months after. If you forget, the government can penalize you by raising your premiums.
Medicare is made up of Part A, sometimes known as hospital insurance and Part B, sometimes referred to as medical or doctors insurance. You can then add drug coverage by enrolling in Part D.
The Advantage Plan, also called Part C, is a managed care option and combines the different parts of Medicare into an all-in-one option, similar to a PPO. You can save money with the Advantage Plan, but you have to use the providers in the network.
You can shop around for drug coverage. An Annual Notice of Change is sent from your Medicare plan provider every year, with changes in coverage for the year ahead. If there are changes, you can shop around during the annual enrollment, from October 15 to December 7.
If your income is too high, your premiums may go up for both Parts B and D. There are some income tax reduction strategies that can sometimes reduce your taxable income to avoid this.
Health Savings Accounts (HSA’s) work with high-deductible health insurance plans. When you sign up for Medicare, you have to stop contributing to your HSA since Medicare is not a high deductible plan.
If you need more information on Medicare, please give us a call at 815-455-6453.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.