Medicare is often the core health coverage for seniors during retirement. Knowing the ins and outs of the program is essential for your retirement finances. Following are some facts that may cause risks to arise in your retirement if not handled correctly.
Enrollment is not entirely free. Each part is broken down as follows:
Part A is typically free for seniors but has requirements for enrollment. This part is automatic and covers treatment in medical facilities.
Part B costs and covers outpatient care and diagnostics. Much like Part A, Part B is automatic. Keeping premiums paid should be a priority in retirement.
Part C is Medicare Advantage, providing alternatives within the private sector. Plans vary based on state and individual needs.
Part D covers drugs prescriptions and has premiums.
However, with all health insurances, Medicare has deductibles, coinsurance, and copays that will impact your budget.
Be aware that price is not locked in the moment you begin Medicare coverage, Parts B & D will change yearly. This has the potential to affect your Social Security benefits. If you are signed up for monthly benefits, if Part B increases it will be deducted from your monthly check automatically. Now, you will not receive a lower monthly payment than you have if Part B increases—the cost adjustment is made with Social Security adjusts for cost-of-living.
Unfortunately, Medicare is only health care coverage—dental and eye are not included. Another common service/product not covered is hearing aids. If you would like that extra coverage, Part C, the private-sector market, is where you can group Part A, B & D together plus purchase plans with other coverage such as eye and dental. Otherwise, the services not covered are marked as out-of-pocket and may require you to use funds from an HSA or other retirement funds.
A huge factor with Medicare is enrollment timing. You have a seven-month span to enroll—three months before your 65th birthday to three months after that month. If you are unable to enroll during the original window, late penalties will be assessed to your Part B and Part D premiums indefinitely.
Having the information needed for success is important so you can make the right decisions for your retirement and health care needs. Medicare is a complicated government program that impacts your retirement head-on—sometimes even before you retire fully.