MEDICARE-TOP 10 GOTCHAS
Sign-up for Medicare begins 3 months before age 65. Waiting till age 65 might delay coverage.
There is a penalty for waiting to sign up for Medicare after age 65. After the Initial Enrollment Period ends-3 months after you turn age 65 you might be subject to a 10%/year penalty -for each year-on your premiums-forever.
Similarly there is a penalty for waiting to sign up for Medicare Part D if you wait until 2 months after the Initial Enrollment Period ends. Calculated at 1% of the average Part D plan each month-forever.
If your income in retirement exceeds $85000 single or $170000 married your Part B and Part D premiums will be more expensive. (IRMAA-Income related monthly adjusted amounts).
There are two main combinations available for retiree medicare coverage-traditional Medicare and Medicare Advantage-Part C. Traditional includes A/B/D and Medigap. Part C is combined with Parts A and B but not D. Part C is considered managed care and limits choices but can be cheaper.
Traditional Medicare does not include long term care, dental or vision. Part C might include dental and vision but not long term care.
Medigap or supplemental insurance has 10 options that are “lettered”. But-good news-every insurance company’s coverage is exactly the same -only difference is price. (Hint- Plan G is most expert’s choice).
You cannot contribute to a Health Savings Account if you are signed up for Medicare.
Part D should be reviewed every year by each person-not done as a couple. Medications change and insurance companies change prices. The insurance companies expect most people won’t change so might have a low starter price and later raise prices.
If you are still working at age 65 and have medical coverage you should check with your benefits coordinator to see how to coordinate that with Medicare.