Are you getting ready to go on Medicare? If so, you’ve probably learned there are a lot of important decisions to make. And if you’re like most people, you want to make the right Medicare decisions because they’ll affect your future. However, with so many options and opinions out there, it can be hard to know which decisions are the right ones.
Today, we’re going to show you four important steps you need to take as you plan for retirement and enroll in Medicare.
Approaching Medicare: 4 Important Steps
Here are four key steps to take when Medicare planning. These steps are best taken six months before your Initial Enrollment Period (IEP), which begins three months before your 65th birth month. Your IEP will go by faster than you think so it’s best to get all of your research out of the way before the clock starts ticking.
Step 1: Get Educated
The key to finding a Medicare plan that may fit your needs is to get educated about Medicare, including how the Medicare number works. Before you make any important decisions, you have to understand what you’re doing and why so you’re confident that you’re making the right Medicare choices.
There’s no lack of information about Medicare. In fact, the closer you get to 65, the more information and advice you’ll hear about Medicare, from ads in your mailbox and email inbox to commercials on TV and pushy insurance agents calling you on the phone. Unfortunately, most of this “information” is meant to sell you something. So it’s hard to trust that the information you’re being given is reliable.
You can become educated about Medicare by simply going online. You can spend hours sorting through the millions of resources like online Medicare seminars, workshops, articles, and videos and try to find credible information that 1) isn’t trying to sell you something and 2) answers your questions.
After all that searching, you might feel a bit more aware of the Medicare process, but you may also feel overwhelmed and unsure of the right steps to take.
You can also ask friends and family about their Medicare decisions and try to comb through their answers to find out what will work for you. But the problem is, Medicare isn’t one-size-fits-all. Your friends and family have different health needs, take different medications, and see different doctors than you, so what worked for them may not work for you.
Most people relying on these three routes to learn about Medicare may end up confused and overwhelmed. That’s why we are here to help.
Step 2: Enroll In Medicare Part A and B
The second step you need to take is deciding when you’re going to enroll in Medicare A and B. The year you turn 65, it’s essential while preparing for retirement to educate yourself on Medicare and seek guidance on when you will enroll.
Medicare Enrollment While Retired
Now if you’re retired, there’s really no decision to make. You should enroll in Medicare A and B since you have no employer coverage options. If you’re on Social Security, you’ll automatically be enrolled in Medicare A and B. In fact, your Medicare card will show up about 90 to 100 days prior to when your coverage begins. If you’re retired but not on Social Security, you will still enroll in Medicare A and B, but you’ll have to self-enroll to initiate the process.
Medicare Planning While Still Working
However, for those of you approaching 65 and still working, you’ll have to decide if enrolling in Medicare A and B is a good choice for you. Many people opt to wait until retirement to enroll in Medicare, while others take Medicare right when they turn 65.
Consider these things while comparing your employer plan with Medicare:
- Look at Premiums: How much are you paying for your work plan premium? Be sure to look at your paychecks as your premium is typically split across your two checks for the month
- Consider Coinsurance: How does your work plan coinsurance compare to Medicare? Is it an 80/20 or 90/10 system?
- Determine Deductibles: What is your work plan’s deductible and how does it compare to Medicare deductibles?
- Review Max-Out-of-Pocket Amounts: Compare your work plan’s max out-of-pocket amounts to Medicare’s. Are you at greater financial risk on your work plan or Medicare?
- Consider Medications: Does your work plan cover all your medications? If not, will Medicare cover medications your work plan doesn’t?
If your present work plan costs you more than Medicare coverage and offers less than what Medicare will offer, it may be in your best interest to enroll in Medicare A and B when you turn 65, even if you’re still working.
One important caveat here is if you have children or a younger spouse who are covered by your work plan. If so, they will no longer have coverage when you get on Medicare. In this case, we strongly encourage you to stay on your work plan until you retire.
Step 3: Decide Between Advantage and Supplemental Plans
Once you decide to enroll in Medicare, there are generally two common ways people choose to receive additional coverage beyond Medicare Parts A and B. Some individuals consider Medicare Advantage (Part C) plans, which provide Medicare-covered benefits through a private plan, while others choose to remain in Original Medicare and add a Medicare Supplement (Medigap) plan to help cover certain out-of-pocket costs.
Medicare Advantage Part C Plans
When you enroll in a Medicare Advantage plan (Part C), you receive your Medicare-covered Part A and Part B benefits through a private insurance company rather than through Original Medicare directly. Many plans also include prescription drug coverage, although coverage details can vary.
Some Medicare Advantage plans may have lower monthly premiums, although you must continue to pay your Medicare Part B premium. Instead of relying primarily on premiums, these plans often involve cost-sharing, such as copayments or coinsurance, when you receive services. Costs and coverage can vary depending on the plan and the services you use.
Medicare Supplemental Medigap Plans
The other option is to take a Supplemental plan, also called Medigap policies. Unlike Advantage plans, Supplemental plans do not replace Medicare A and B. Instead, they leave Medicare in the first payer position and fill gaps left by Original Medicare. If you go the Supplemental plan route, you’ll have to purchase a separate Medicare Part D plan for your prescription drugs.
Supplemental plans charge you monthly premiums.
Step 4: Seek Enrollment Assistance
The final step you need to take when approaching Medicare is to seek enrollment assistance. Most people don’t want to navigate additional insurance enrollment on their own, so they look for professional Medicare enrollment help.
There are generally two options when it comes to Medicare enrollment help. First, you can use a captive agent. Captive agents are employees of one single insurance company, hence the name captive. Because of this, they have limited insurance options. Why? Captive agents only have access to the products sold by their company.
The other option is to use a licensed broker. Brokers do not sell for one single insurance company. Instead, they have access to a range of products, meaning they can compare numerous plans to find the one that will work best for you.
The good news is that it’s illegal for both captive agents and brokers to charge for their planning services, so there’s no reason why you shouldn’t seek professional help. We strongly urge everyone to work with a qualified, licensed agent to help you with the Medicare enrollment process.
Get Medicare Help as You Plan for Retirement
Still need to learn more about Medicare before enrolling? Watch our free online Medicare workshop to learn the basics.