4 Medicare Costs That Can Affect Your Retirement
April 24, 2023 | Kari Mellone
Retiring is a time of many changes, and one of the most significant considerations you’ll encounter will be your healthcare. Learning about Medicare costs can help ensure you’re taking a proactive approach to manage your retirement savings. It’s important to know not only what services Medicare covers but also what is not covered. Here we will review four Medicare costs that seniors should know when budgeting and planning for retirement.
1. Medicare Isn’t Free
Medicare consists of several parts, each with varying associated costs, including premiums, deductibles, copayments, and coinsurance.
Original Medicare:
Medicare Part A – often referred to as hospital coverage
Medicare Part B – commonly referred to as medical coverage
Other Coverage Options:
Medicare Part C – Medicare Advantage (MA/MAPD plans)
Medicare Part D – prescription drug coverage
Medigap Plan – otherwise known as a Medicare Supplement plan that can help pay for extra costs not covered by original Medicare Parts A & B
So what about the costs? For most individuals, Medicare Part A will be premium free. Medicare Part B, on the other hand, will have a premium, and the amount is based on your income. Medicare Part A and Part B make up Original Medicare, which can leave gaps in your healthcare coverage. Therefore most will enroll in supplemental coverage which, may include Medicare Part C (Medicare Advantage), Medicare Part D (prescription drug coverage), and/or a Medigap policy. These types of plans generally have an associated premium and can have deductibles, copays and/or coinsurance. The amount you will pay for your healthcare services will vary based on your plan selection.
Learn More: Medicare Coverage & Costs
2. Late Enrollment Penalties
When you turn 65 years old, you have a 7-month window to enroll in Medicare. This time frame includes 3 months before you turn 65, the month of your birthday, and the 3 months following. Others may qualify sooner based on health conditions or disabilities.
Some people will automatically be enrolled in Medicare Parts A and B, but others must sign up. If you are not automatically enrolled in Medicare Parts A and B, you will need to sign up during your initial enrollment period to avoid a penalty. This penalty is an additional fee that you will be required to pay every month you have Medicare coverage. There is also a penalty for delayed enrollment in Part D Plans.
It is important to note that if you have creditable coverage through an employer, then this penalty does not apply. However, some employers may require their employees to enroll in Medicare when they become eligible – so be sure to check with your human resources department for more details.
3. Medicare Doesn’t Cover All Healthcare Services
Original Medicare doesn’t cover many essential healthcare services such as routine eye exams, hearing exams, or dental services. Additionally, original Medicare will not cover the costs of hearing aids. Medicare may cover some vision-related services such, as glaucoma and macular degeneration tests and treatment, as well as cataract surgery.
Although original Medicare does not cover most vision, hearing, and dental services, other Medicare plans, such as a Part C Medicare Advantage plan, typically will have coverage in these areas.
Read: Does Your Medicare Advantage Plan Offer Extra Benefits?
4. Costs Can Change
When planning your Medicare and healthcare costs for retirement, it’s important to keep in mind that the associated expenses can change over time. The amount you pay for your Medicare Part B premium and other Medicare coverage elections can change from year to year. You’ll also consider that you may have an increase in healthcare needs as you age, resulting in higher costs. By being aware of healthcare premiums and cost increases, you can be better prepared when planning your retirement budget.
Related Read: Tips for Financial Planning As You Retire
There is so much to consider when planning for retirement and signing up for Medicare. Working with an experienced insurance broker can help you know your plan options and determine what is ideal for your individual needs. Contact Twin City Underwriters for help today.
Choosing a Medicare plan can be difficult. Twin City Underwriters helps Medicare recipients in Minnesota, Wisconsin, North Dakota, South Dakota, Iowa and Florida find the Medicare plan that meets their unique needs. Schedule a one-on-one meeting with one of our Medicare insurance brokers to get your questions answered!
Do you need help with Medicare, insurance and health plans? Explore your options with Allina Health Aetna, Blue Cross/Blue Shield of Minnesota, Medica and UCare. We work with you to find the best plan for your needs and budget. Contact us today to get started.
