Plan for Medicare by Age 62
According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 in 2024 may need approximately $330,000 saved (after tax) to cover health care expenses in retirement.
Parts of Medicare
Important Medicare Topics
When Should I begin planning for Medicare?
How do I decide which Medicare options are best for me?
Important Medicare Rules
2025 Medicare Facts and Figures
When should I begin planning for Medicare?
Pre-Planning: Ages 62 - 65
Begin estimating your health care costs in retirement (retirement analysis).
Before executing any transactions* that will increase your Modified Adjusted Gross Income, determine the potential fee from IRMAA** impacting Medicare Parts B and D premiums (appeal using Form SSA-44).
Medicare choices are not final, however, Medigap policies may require medical underwriting.
* Roth Conversion, Real Estate Sales, IRA Withdrawals, Executive Compensation Payouts, etc.
** Income-related monthly adjustment amounts, based on tax return from two years prior. (ex. at age 65, utilizes tax return from age 63)
Initial Enrollment Period
(IEP - 7 months)
- Once enrolled in Medicare you can no longer contribute to a health savings account (HSA).
- After your Initial Enrollment Period ends, you can only sign up for Part B and Premium Part A during one of the other enrollment periods.
Enrollment Periods
Special Enrollment Period
Covered by an employer group plan (more than 20 employees)
If covered by a spouse through their group plan
Certain life events: losing health coverage, moving, getting married, adopting a child, etc.
How do I decide which Medicare options are best for me?
What is important to you?
Are you considering moving or spending time in other locations?
Are you comfortable utilizing a network type plan (HMO / PPO)?
Do you visit the doctor often?
Do you take prescription drugs?
Would you prefer lower premiums with higher potential out of pocket costs or higher premiums and lower out of pocket costs?
Do you want coverage for dental, vision and hearing?
Important Medicare Rules
Part A has no premium if you or spouse have 10 years (40 quarters) of paying Medicare taxes.
Part B covers 80% of medical expenses leaving 20% exposure; Medigap and Medicare Advantage help limit this max out of pocket exposure.
Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B but didn't sign up for it. Part D charges a 1% premium for every month not covered by creditable coverage.
If you begin collecting social security 4 months before you turn 65 you will automatically be enrolled in Medicare Parts A and B.
HSAs can cover deductibles, copays, coinsurance and premiums of Part A, B & D. (not Medigap or Part C)
Medigap Plans A-N are standard from state to state; however, the premiums may differ.
If you try Medicare Advantage you have 12 months to try it and can switch back to Traditional Medicare, this option can only be used once.
Options for health insurance if retiring before age 65: cobra, spousal plan, marketplace, specialty coverage.
2025 Medicare Facts and Figures
Medicare Part A: Hospital Insurance
To be eligible for a new benefit period, and additional days of inpatient coverage, you must remain out of the hospital or SNF for 60 days in a row. When you start a new benefit period, you will also have a new Part A deductible.
Medicare Part B : Medical Insurance
Medicare Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.
Medigap vs Medicare Advantage (Part C)
Medigap Details: Premiums differ by insurer and state. You can visit any doctor who accepts Medicare. It doesn't cover dental, hearing, or vision, and there is no prescription drug coverage.
Medicare Part D : Prescription Drug Coverage
Part D’s maximum deductible is $590. There is a $2,000 limit on out-of-pocket expenses for co-insurance, as the donut hole has been removed.
Medigap Plans
Medicare supplemental (Medigap) Plan G can be sold with a high deductible option. If you generally spend enough on health care to meet the deductible, then a high-deductible plan would be worth it if the amount you spend to meet the deductible and the premiums are less expensive than the premiums of a standard insurance policy.
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