In January, my husband Darnay and I began reviewing all of the things we had to do financially to prepare to turn 65 later that year. Back in March, I wrote about Step 1: Cutting costs for Next Avenue. This month I started wading into the minefield which is Medicare, our step 2.
Darnay will be 65 in November and I'll follow in December. So I started my Medicare homework in April because, according to Medicare rules, we’re going to be three months before we’re 65.
Since Darnay and I turned 64, we've received at least four Medicare-related mails a day, aimed at selling us all the different plans we might consider from private health insurers. There are so many twists, turns, and Medicare myths that it was almost crippling to read through all of the information to decide what was best for us.
Insurance coverage from my husband's employer and Medicare
As a freelance writer for over 30 years, I have always relied on health insurance coverage under Darnay's employer plan through his teaching job at a public school. Since he decided in April to continue teaching beyond his 65th birthday, fortunately we will have access to his employer protection in the coming year as well. But he won't have any insurance coverage after he retires, so neither will I.
To start the Medicare registration process, we first looked at our health goals, our financial realities, and how they could affect our lifestyle and income in retirement. I feel that every day has the potential to present new pains, pains, or diagnoses. We knew that we didn't want to go for less health insurance than we do now.
I have compiled a list of all the health problems and health histories of our families to get an idea of what may be in store for us.
I have high blood pressure which I control through monitoring, prescription medication, and lifestyle adjustments. My husband has not been diagnosed with any chronic illnesses, but as a man who is soon to be 65, he has to keep an eye on his medical check-ups.
Overall, we're in pretty good shape, apart from the looming dance of back and knee problems that often come with aging. Our goal is to stay mobile for as long as possible so we want to make sure we cover physical therapy when needed.
But we've both seen some costly medical needs our late parents and grandparents had to deal with – like breast, ovarian, and prostate cancer; Alzheimer; Diabetes; Glaucoma and cataracts – these could be predictors for the future. We both already wear glasses.
The cover we'd need
Between the two of us, I'm the only one with a recipe, and luckily it's cheap. But that could change. We have all heard the horror stories about the choice some older, steady-income people have to make between expensive medication and food.
Once I had an inventory of what I medically needed, I looked at what type of Medicare coverage it would take to get there.
After drowning in flyers, articles, and advice from friends who enrolled in Medicare, I was still overwhelmed. So I decided to call the federal government's Medicare toll-free line (800-633-4227; that's also 800-MEDICAR). It was the best decision I made in the process.
I worked with a Medicare specialist, Edward McFarland, who spent time answering all of my questions over the phone. I'm happy to say that it only took me two minutes to get through to a real person.
This is how Medicare works
Before I explain what I heard and decided, let me briefly explain how Medicare works.
Learn more: Your Guide to Medicare Open Enrollment: How to Buy, Switch, and Compare Plans
As you may know, Medicare has two basic components known as Part A (Hospital Insurance) and Part B (Health Insurance), and sometimes referred to as Original Medicare. Part A is the non-contributory insurance that the government offers from the age of 65, according to McFarland.
The key is to sign up for your Part A coverage ASAP so you don't avoid penalties for late signing up. In our case, since we're keeping Darnay's employer-sponsored coverage for inpatient and hospital expenses, McFarland said, Medicare Part-A coverage will come in as secondary coverage should we need it.
“Part B deals with doctor visits and prevention, including screenings and treatments, and medical equipment. The standard premium starts at around $ 148.50 per person per month, ”said McFarland.
Since we have health insurance for as long as Darnay is in his job, we decided to wait before registering for Part B of Medicare. We make sure that coverage begins when Darnay's coverage ends. General enrollment for Part B runs from January 1st to March 31st each year.
So, in the end, Darnay and I wanted to consider rewards of a little under $ 300 a month for Part B. These premiums will come straight from our social security checks, McFarland explained, once we start claiming social security benefits. The U.S. government changes the premium amounts every year, but those of 2022 will likely come pretty close to those of 2021.
One important thing about Medicare Part B: It only pays for medically necessary treatments and does not cover dental, visual, or hearing care.
See also: You could be unknowingly triple your Medicare premiums – be careful
Medicare Advantage plans
If you don't want to sign up for Original Medicare, you can sign up with private health insurance for a Medicare Advantage plan, which is becoming increasingly popular. Medicare Advantage is sometimes referred to as Medicare Part C and is a one-stop-shopping plan with Medicare Part A and Part B coverage, with the exception of hospice care.
Often times, these plans include additional benefits that Original Medicare doesn't offer, such as dental care and glasses. Most also include coverage for prescription drugs (known as Medicare Part D).
Your exact coverage under a Medicare Advantage plan will depend on the benefits you select and the amount of your payment. But here's the big caveat: most Medicare Advantage plans require you to see doctors on their networks at the lowest cost; Some do not cover services from providers outside the network and service area of their plan at all.
By the time I did my homework, I was able to see the benefits of a Medicare Advantage plan that works much like an HMO or PPO. But McFarland said if you travel a lot and have Medicare Advantage, you could get huge medical bills for when you need care and you are off the network.
Darnay and I have to think about it.
As for prescription drug coverage, most Part-D plans have an annual deductible that doesn't exceed $ 445 this year. However, there is a limit to how much a Part D-Plan covers.
See: How to reduce the expensive prescription costs with Medicare
In 2021, once you and the plan have spent $ 4,130 on covered medication, you will find yourself in what is known as the "donut hole" coverage gap. Then, pay no more than 25% of the cost of your plan's covered branded prescription and generic drugs until the donut hole ends at $ 6,550 in cost. (In 2022, the donut hole will start at $ 4,430 and end at $ 7,050.)
Coverage and rules for prescription drugs
McFarland suggested that we compare our options in Part D while looking at our medication needs. By registering openly every year, we can change our Part-D options annually.
My blood pressure medication lisinopril costs me $ 4 a month with our current insurance policy. We'll be doing this again next year when our employer-based coverage ends.
So while we have to sign up for Medicare Part A soon, we don't have to make big decisions about Part B or Part D as long as we keep Darnay's coverage for another year – or while he's working. As Medicare Advantage plans and providers change every year, we're starting to compare them closer to when we need to sign up.
Just before October 2022, when we expect Darnay coverage to end, let's take a deep breath and start the Medicare hunt again. But if he continues to work, we'll stick to employer coverage and re-enroll in Part A for another year.
Next read: Are you planning to retire? Here is a list of at least 14 things to consider first
How to Make Smart Medicare Decisions
Here is my advice on where to get the best information to help you make your Medicare decisions:
Start by calling Medicare (800-772-1213). You will get a knowledgeable person on the phone who will guide you through your options depending on your circumstances. This hotline takes calls 24 hours a day.
Visit the Medicare website, Medicare.gov. It does a good job of how the program works and what things cost.
Check out your state's free Health Insurance Assistance Program (SHIP). You can call or visit the website for information about Medicare and the Medicare Advantage plans available in your state. As with the Medicare hotline, an advisor at SHIP can accompany you through the process. You can find your state's website on the website of the National Network of State Health Insurance Assistance Programs.
And if you really want to get into the weeds, maybe buy the 2016 book ”Get what you deserve for Medicare: Maximize your insurance coverage, minimize your costs. " It's from Medicare connoisseur Philip Moeller; Visit Moeller's Get What’s Yours website for the latest Medicare premium and deductible figures, as well as his frequent blog posts.
Andrea King Collier is a journalist and writer based in Lansing, Michigan.
This article is reprinted with permission from NextAvenue.org, © 2021 Twin Cities Public Television, Inc. All rights reserved.
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