Medicare and Retiring

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With a plethora of information on Medicare, the rules pertaining to it should be simple and clear.  Unfortunately, that is not the case.  A large number of people approaching their 65th birthday become inundated with mountains of paperwork in their mailboxes from health insurance companies wanting to help those about to become eligible for Medicare adding to the confusion.

Just choose a letter of the alphabet and you can almost be assured that there is a Medicare part attached to it.  The federal government provides a booklet entitled Medicare & You to help clarify the often confusing subject, the many different nuances of each part of Medicare can still be elusive.

If a person has the time and inclination to learn about each different part of the Medicare system, there are courses one can take.  Just plan to spend several hours on each part — from Part A, Part B, Part C, Part D, etc.  It is no wonder that people struggle to make informed decisions.

Social Security and Medicare Part A and Part B

For those already receiving Social Security, there is no need to apply for Medicare because those individuals are automatically enrolled.  Medicare Parts A and B are included with Social Security benefits.  However, for those not receiving Social Security, they have 3 months before and 3 months after their 65th birthday to apply.  This is important for those individuals who have decided to continue working past their 65th birthday.

Part A of Social Security is provided by the federal government and paid for by individuals while working in the form of taxes.  Part B is also provided, although at a monthly premium paid by the individual.  What is left is the need for prescription drug coverage and supplemental insurance.

To confuse the matter even further, Part A provides hospital coverage while Part B provides coverage for items such as doctor visits and preventive items like flu shots.  For everything else, there is supplement insurance coverage available, at a price, known as Medigap.  Without this supplemental insurance, which is strictly voluntary, co-pays and deductibles will need to be paid out of pocket.

Part C The Advantage Plan

For those who have private insurance and do not use Parts A and B of Medicare, there is the Advantage Plan.  This means that the insurance company providing the plan receives what is paid by the government for Part A and the individuals Part B premium.  Not every insurance company offers a Part C plan, and these plans have an additional co-pay for doctor’s visits.

Another downfall to Part C insurance is that in-network providers are the only physicians allowed, including primary physicians.  Also, for the many retirees who travel, if there is a medical need while traveling and there is no in-network hospital, the patient will end up paying out-of-network rates and more than likely will have to pay the difference out-of-pocket.  For this reason, many people do not choose the Advantage Plan.  Another point is that Medicare does not pay for medical expenses outside of the United States.

Part D Prescription Coverage

Prescription drug coverage is covered under Medicare Part D.  This is not as simple as throwing a dart and choosing a provider.  Not all companies provide the same benefits.  Many different companies have different tiers when it comes to different prescription drugs.  Differences in deductibles, co-pays, and tiers make it a difficult choice when trying to decide which company to pick for Part D coverage.  One starting point is to take the current prescription drugs and compare to each provider to determine the out-of-pocket costs in addition to the cost of the Part D coverage.

Part F Supplemental Insurance

If coverage for deductibles and co-pays for hospitals and doctors is warranted, then Part F supplemental insurance should be considered.  For those many retirees who travel after retirement and are concerned with in-network and out-of-network hospitals, Part F should be included.  Another added bonus of Part F supplemental insurance is that there is 80% hospital coverage in a foreign country, so retirees can take that transatlantic cruise without worry.

The Other Letters of the Alphabet

Other types of supplemental insurance fall under the letters G, L, and N.  For those considering all of their “letter” options, AARP can provide some guidance based on a person’s particular situation.  Research is the key to knowledge and all avenues should be looked at thoroughly before a choice is made.

Where to Go for Help

If you are still confused, there are numerous sites that can help explain each part of Medicare.  Some helpful sites include:

  • www.SSA.gov – This official government site is full of rules and regulations for hours of reading
  • www.Medicare.com – This nonprofit site has many different links from an initial introduction to Medicare, Medicare Advantage explanations, Medigap eligibility, prescription drug plans, and numerous articles on Medicare
  • www.cms.gov – This government-run site is run by the Centers for Medicare & Medicaid Services and includes information ranging from Medicare, Medicaid/CHIP, coordination of Medicare-Medicaid benefits, private insurance, along with regulations and guidance.
  • https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/Fraud-Abuse-Products.pdf – Included in this link are publications, training, and information from the Medicare Learning Network.  Information provided ranges from the Affordable Care Act, Medicare fraud, and abuse, drug diversion information, general training for Medicare Parts C and D, protecting and safeguarding your medical identity, along with other web-based training, fact sheets, booklets, and educational tools.
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