What You Need to Know About Medicare – Part 1 of 8

Josh Mungavin, CFP® Principal, Wealth Manager

Josh Mungavin, CFP®
Principal, Wealth Manager

Unforeseen healthcare costs can be one of the most destructive forces to an individual’s financial and retirement plan.  With appropriate forethought, one may reduce the risk of the financial devastation that a large health care bill can cause.  This article discusses the steps one should take to compare Medicare plans and some of the basic plan details with which one will need to be familiar in order to make an informed decision.

Please send this article out to friends and family so that they can forward it to the people in their lives that need this information.  The following will be useful to anyone who is over 60, disabled, has kidney failure, or Lou Gehrig’s disease.

General Medicare Overview

Making the right Medicare decisions at the right time can save you thousands of dollars. This, however, is no easy task due to the complexity of the Medicare system, timelines, and an uncertain future.  An enrollee should begin to research available plans four or even five months before he or she is eligible to enroll.  As benefits generally do not begin until the month following enrollment, it is important to be ready to enroll as soon as you are eligible so that your benefits kick in as soon as possible.  After enrollment, you should set aside time every October to review your plan and make sure it remains the appropriate plan for your specific circumstances.

Eligibility

You are first able to sign up for Medicare:

  • Three months before your 65th birthday. Coverage should automatically begin the first day of the month in which you turn 65 years old if you are receiving Social Security, but it is important to research the available plans to ensure the default enrollment is appropriate for you.  If you are delaying Social Security, you will need to sign up for Medicare and make appropriate payment arrangements.
  • Three months before your 25th month of disability. Coverage will begin on the first day of your 25th month of disability.
  • If you are diagnosed with Lou Gehrig’s disease (ALS).
  • If you are diagnosed with end stage renal disease and require dialysis.

Step by Step Strategy

While I am able to give you some general information, I can’t tell you which Medicare plan is right for you.  The best approach for someone else may be the worst for you.  To find the best plan for your circumstances:

  • Input your information on Medicare’s website at https://www.medicare.gov/find-a-plan/questions/home.aspx. Use this tool to find the best options for original Medicare and the best Medicare Advantage plan for comparison.
  • Go to http://www.medicare.gov/find-a-plan/questions/medigap-home.aspx to find a Medigap policy to complement the original Medicare policy you have chosen for the comparison.
  • Once you have chosen a Medicare Advantage plan and a Medigap policy in coordination with original Medicare, you can compare the two options directly.
  • Elect either Medicare Advantage or original Medicare with or without Medigap.

Keep in mind that once you make a Medicare plan election, it generally can not be changed until the next open enrollment period.  Not all doctors accept Medicare so it is important to speak with your doctors before deciding on which plan or combination of plans is appropriate for you.  It is also very important to note that Medicare does not provide a nursing home benefit.

Where to Go For Extra Information

The Medicare Handbook http://medicare.gov/publications/pubs/pdf/10050.pdf

New Enrollee Checklist http://www.medicare.gov/welcometomedicare/checklist.html

The State Health Insurance Assistance Program (SHIP) is funded through grants to help provide information, counseling, and assistance to Medicare beneficiaries and their families with questions related to Medicare, Medigap, Medicare Advantage, Medicare Savings programs, Medicaid, Long Term Care Insurance, and other health insurance issues.

Your State Department of Insurance can be a good source of information with regard to Medicare policies available in your area.

Medicare provides informational resources online at www.Medicare.gov or over the phone at (800) 633-4227.

National PACE Association www.npaonline.org.

The Social Security Administration provides information on Extra Help www.socialsecurity.gov/extrahelp or by phone at (800) 772-1213.

Check out our next blog post for more on Medicare. As always feel free to contact Josh Mungavin with any questions by phone 305.448.8882 or email: JMungavin@ek-ff.com 

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