No matter where you are in life, the one event that you share with every other American is the obligation to enroll in Medicare. As mundane as that may sound on the surface, it is vital that you understand how the provisions and restrictions will impact your financial future. Without getting too technical, here are seven facts about Medicare that will help you plan for your future enrollment.
1. Age Matters: The age at which you need to apply for Medicare is 65, and you are allowed to enroll anywhere from three months prior to your birth month to three months following your birth month. That gives you seven full months to secure coverage, after which you can expect a penalty for failure to comply. And yes, you still have to sign up even if you are employed.
2. Existing Insurance: If you work full-time and your employer provides you with insurance, then that may become your primary insurance as long as your employer meets certain requirements. Medicare may serve as a secondary insurance to cover some or all of what the employer plan does not.
3. Supplemental Plans: Even if you have Medicare coverage, you may still need supplemental or replacement plans to pay for whatever Medicare does not pick up. (Note: These plans may only pay for services that Medicare approves.)
4. Income Parameters: If your household income exceeds $170K, then you may pay a higher premium for Medicare insurance.
5. Out-of-Pocket Expenses: Routine vision, dental, and hearing exams are typically not covered under Medicare or supplemental plans, so you will need to factor these costs into your budget.
6. Doctors and Prescriptions: Before you enroll in Medicare, it is important that you verify your providers will accept Medicare and that any prescription drugs you need are covered. You should also confirm that the supplemental insurance covers you if you become ill while traveling.
7. Premium Hikes: The Medicare Trust Fund is already experiencing a deficit, so we expect the baseline premiums on Medicare may increase.
This list certainly is not comprehensive, nor does it disclose all of the specifics of Medicare health coverage for those 65 and older. However, it does provide an overall view of what to expect so that you can start thinking about and preparing your finances for this transition.
Do you have questions about Medicare and its impact on your future? Contact Guidant Wealth Advisors so that we can review your plan.