Following the post-COVID stimulus hangover in 2022, the bull market has continued to run. One of the key factors was the Federal Reserve’s decision to
Alphabet Soup: Making Sense of Medicare
Published Date : August 5, 2014
One of the biggest challenges facing retirees is the rising cost of healthcare and how they’ll pay for it. Medicare, the country’s health insurance plan for Americans age 65 and older, helps to make health care affordable; however, the enrollment process and decisions of when and how to file can be complicated and stressful. If you are approaching this milestone birthday, it is important to get familiar with these Medicare basics.
The Medicare Alphabet
Part A: Hospital Coverage
Medicare Part A is generally premium-free for those who have paid at least 40 quarters of FICA taxes and available at a steep premium for those who have not.
Part B: Physician and Outpatient Coverage
There is a monthly premium cost, re-calculated each year, for Part B based on your income. You can “opt out” of Part B, but should only do this if you have coverage from another source like an employer’s group health plan.
Part C: Medicare Advantage Plans
A Medicare Advantage Plan is offered by a private company contracting with Medicare to provide all of your Part A and B benefits to you and it works like an HMO or PPO for a monthly premium charge. These plans may also provide prescription drug coverage making Part D unnecessary.
Part D: Prescription Drugs
Like Part B, there is a monthly premium cost based on your income. Part D can be added along with Parts A and B (also known as “Original Medicare”) to provide prescription drug coverage. Part D may not be necessary if you have coverage from another source like an employer’s group health insurance plan.
When Should I Apply?
Given that age 65 is no longer considered full retirement age, there may be some confusion about when to apply. There is a seven month application window for Medicare Parts A and B that includes the three months before your 65th birthday, your birth month, and the three months after your birthday. It is critical that you enroll during these seven months even if you delay receiving Social Security benefits until a later date. Missing the deadline could mean a delay in benefits and late penalties. Additionally, you could be forced to wait until the next open enrollment period which is January 1 – March 31st of the following year and pay higher premiums when you do enroll. If you begin receiving Social Security benefits prior to age 65, you will be automatically enrolled in Parts A and B.
What if I am Still Working?
If you are still working at age 65, you might be thinking that your employer’s group insurance plan has got you covered — and it might. While it is mandatory for employers of more than 20 workers to provide the same group health insurance coverage to workers age 65 and older that they offer to younger workers, it might still be in your best interest to enroll in Medicare Parts B and D. And you may be required by your employer to enroll in Part A. Be sure to check with your company’s Benefits Administrator to fully understand the action you need to take for your particular situation before signing up for any parts of Medicare —and ideally well before your 65th birthday.
A review of all insurance policies, including health insurance, is part of the planning work that we do for clients at Sand Hill. We want to make sure you have the appropriate coverage and resources necessary for a long and healthy life.
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Information provided in written articles are for informational purposes only and should not be considered investment advice. There is a risk of loss from investments in securities, including the risk of loss of principal. The information contained herein reflects Sand Hill Global Advisors' (“SHGA”) views as of the date of publication. Such views are subject to change at any time without notice due to changes in market or economic conditions and may not necessarily come to pass. SHGA does not provide tax or legal advice. To the extent that any material herein concerns tax or legal matters, such information is not intended to be solely relied upon nor used for the purpose of making tax and/or legal decisions without first seeking independent advice from a tax and/or legal professional. SHGA has obtained the information provided herein from various third party sources believed to be reliable but such information is not guaranteed. Certain links in this site connect to other websites maintained by third parties over whom SHGA has no control. SHGA makes no representations as to the accuracy or any other aspect of information contained in other Web Sites. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. SHGA is not responsible for the consequences of any decisions or actions taken as a result of information provided in this presentation and does not warrant or guarantee the accuracy or completeness of this information. No part of this material may be (i) copied, photocopied, or duplicated in any form, by any means, or (ii) redistributed without the prior written consent of SHGA.
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