![]() However, the rules around such a move can be complicated, so it's best to speak with your HR department about whether you should still sign up during your IEP. Once you lose your workplace coverage, you'll have eight months to sign up for Medicare (but only two months for Part D) during a special enrollment period (SEP). If you have health insurance through your or your spouse's employer, you may be able to delay Medicare enrollment. Otherwise, you must enroll during your initial enrollment period (IEP)-a seven-month period starting three months before you turn 65 and ending three months after your birthday-during which you should also enroll in Part D. ![]() ![]() Timing: If you begin Social Security benefits before age 65, you'll automatically be enrolled in Medicare Parts A and B when you turn 65. If you want a prescription drug plan, you'll have to purchase a private policy (Part D) at an average monthly cost of $43-though, as with Original Medicare, retirees with higher incomes should expect to pay more. Premiums vary widely based on level of coverage, as well as age, health, location, sex, and whether your acceptance is guaranteed or subject to review.įor example, a person in Chicago who chooses a Medigap Plan G policy-which provides the most comprehensive coverage for newly eligible Medicare recipients-can expect to pay between $109 and $748 per month, whereas a person in Miami can expect to pay between $228 and $1,820 for the same plan. Medigap), which will cover some or most out-of-pocket expenses incurred from Original Medicare, depending on which of several standardized policies you choose. To help manage costs, you can purchase a private Medicare Supplement Plan (a.k.a. There's an annual deductible of $226 in 2023, after which you'll generally be responsible for 20% of outpatient bills-though certain services, including some preventive care, won't cost you anything. Part B requires income-based premium payments, starting at $164.90 per month in 2023 but going as high as $560.50 for wealthy individuals.There's a deductible for each hospital stay ($1,600 in 2023), along with a daily copay for stays of more than 60 days-starting at $400 per day and increasing to 100% of the bill for stays of 150 days or longer. Part A typically has no premiums, so long as you or your spouse paid Medicare taxes for at least 10 years while working."To maximize coverage and minimize out-of-pocket costs-which can be substantial-there are really just two main options."Ĭoverage and costs: Original Medicare comprises Parts A and B: ![]() "Choosing the right Medicare coverage is critical because it affects the doctors you'll see, the hospitals you'll go to, and the costs you'll pay out of pocket-often over the remainder of your lifetime," says Chris Kawashima, CFP ®, a senior research analyst at the Schwab Center for Financial Research. (Some plans also offer additional coverage, such as dental and vision.) But these plans have drawbacks, including limited provider networks and a higher incidence of coverage denial. Part C), cover the same services as Original Medicare, generally include prescription drug coverage, and cap out-of-pocket expenses. Private insurance policies, known as Medicare Advantage plans (a.k.a. To complicate matters, Medicare isn't retirees' only option. Services outside its scope-including routine dental and vision care, prescription drugs taken at home, and long-term care-must be paid out of pocket or via a separate private insurance policy. Over the years, Congress has greatly expanded the pool of eligible participants, but Original Medicare still covers only certain services, including hospital stays (under what's known as Part A) and outpatient medical care (under Part B). Introduced in 1965, the program offered basic insurance to retirees who otherwise lacked coverage. Then again, Medicare was never intended to cover all health care services. Indeed, a couple with average Medicare premiums and out-of-pocket expenses may need between $212,000 and $318,000 in savings to cover their health expenses throughout retirement, according to an analysis by the Employee Benefit Research Institute. 1 The not-so-good news? The government health insurance program doesn't cap costs, potentially exposing many retirees to higher-than-expected out-of-pocket expenses. Here's the good news about health care in retirement: 94% of Medicare beneficiaries age 65 and up are satisfied with their quality of care.
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