Early summer is a popular time for people to retire, and retirement usually means leaving your employer's insurance plan and enrolling in Medicare.
However, not understanding some of the complicated nuances of Medicare can end up costing you thousands of dollars.
That's why it's important to learn about your Medicare options before you retire.
Michael Reeves, Assistant Director of Sales, Government Programs with Regence BlueCross BlueShield, helped us sort it out.
He says some people must go on Medicare at age 65 or face a lifelong penalty. Those include people who are self-insured through Healthcare.gov or another individual exchange, those with COBRA coverage or retiree benefits (such as military retirement) and those who work for an employer with fewer than 20 employees.
People who have health insurance through their employer can keep that coverage until they retire, as long as the company has more than 20 employees.
It's also important to know that original Medicare includes Part A and Part B.
Medicare Part A is hospital insurance. It is cost-free if you or your spouse paid into social security for at least 10 years. Part A has deductibles and the benefit periods reset multiple times per year.
Part B covers services provided by health care providers and durable medical equipment. It requires monthly premiums and deductibles.
Part D is prescription drug coverage and also includes premiums, deductibles and co-payments.
But, there are things Medicare Part A and B do not cover including dental, vision, and hearing services. Supplemental plans can help pay your out-of-pocket costs.
Michael says Medigap and Medicare Advantage are offered by insurance companies like Regence.
Medigap plans cover gaps in Original Medicare coverage like deductibles, co-pays & coinsurance
Often called Part C, Medicare Advantage plans cover gaps plus dental, vision, hearing benefits. Part C also offers wellness benefits like fitness and nutrition programs, gym membership, and acupuncture.
To get Part C, you must be enrolled in Medicare A and B and you will continue to pay Part B premiums.
Insurance company premiums apply, which are generally lower than Medigap plans and they may have lower out-of-pocket costs than Medicare Part B.
Michael says it's important to sign up at the right time or you could be at risk of delays in coverage and penalties.
Initial enrollment period for Medicare Part A and Part B is right around your 65th birthday.
If you delay your retirement past 65, enroll in a Medicare plan within the 8-month Special Enrollment Period
Begins the month after you retire or when your employer health plan coverage ends, whichever comes first
If you miss either enrollment period, you could face penalties for the rest of your life
Michael also says if you have a health savings account through your employer, stop contributing to it 6 months before you retire – to avoid a tax penalty. You cannot have an HSA and Medicare Part A.
He says there are important things to consider when selecting a plan to best fit your individual needs:
- Is my doctor in-network?
- What about hospitals, clinics, and other medical facilities?
- Do you plan to travel in retirement? Stay in Utah, travel across the country, or travel abroad? Does your insurance level match your lifestyle?
- What about prescription drugs? Find a plan that best fits your needs.
- Lastly, how do you want to be treated? Is local customer service important to you?
There are resources available to help you explore your options before retiring including daas.utah.gov, shiphelp.org, medicare.gov, ssa.gov and you can visit Regence.com/medicare or call Regence at 844-REGENCE (734-3623) – TTY: 711.
