Planning for an unseen future is part of every comprehensive financial planning ballgame. It’s also what tends to hold people back. If you are nearing retirement, many aspects of your investments need to shift, including your healthcare coverage.
As you grow wiser and have integrated many life lessons, it’s time to prioritize your health. In preparing yourself financially for the costs of wellness and healthcare, adding Medicare to your financial roster may be a high-ticket item.
If you don’t know how to go about this, work with a financial advisor in Phoenix or Flagstaff that does.
The common questions that we hear and will answer in this article are:
- When do I need to enroll for Medicare coverage?
- What are the best ways to plan for Medicare open enrollment?
- How much extra healthcare coverage will I need?
First, consider your health priorities
As you plan to opt in for Medicare during open enrollment, it’s essential to assess your health priorities or concerns. Ask yourself:
- What are my health care priorities?
- How much will healthcare cost me?
- Do I need a plan that covers prescription drugs?
- Are there any extra benefits I’m looking for (like vision and dental)? If so, how much will those add to my monthly premium?
Know when to apply for Medicare.
This federally funded health insurance is intended for individuals 65+, some younger individuals with disabilities, and those with end-stage renal disease. Open enrollment runs through October 15 to December 7 annually. However, you can apply for Medicare when you turn 65.
To be more precise, your initial enrollment period lasts seven months. This once-in-a-lifetime enrollment window is not one to miss. You can enroll three months prior to the month of your 65th birthday, lasting through your birthday month and closes on the last day of the third month that follows.
Yes, you can enroll if you miss your window, but penalties might incur. Because this can be confusing, ask for help from a financial advisor for retirement planning in Phoenix or Flagstaff when adding Medicare coverage into your financial plan.
It’s essential to understand the different Medicare options that cover specific areas of service:
- Medicare Part A (Hospital Insurance): covers inpatient hospital stays, hospice care, care in a skilled nursing facility, and some home health care. These premiums are free for those who made Medicare contributions for ten+ years through payroll taxes.
- Medicare Part B (Medical Insurance): covers outpatient care, certain doctors services, preventive services, and medical supplies.
- Medicare Part D (prescription drug coverage): Helps cover the cost of prescription drugs (plus some vaccines or shots).
Keep in mind that you are responsible for paying premiums for other parts of the Medicare program. To complete the application process you’ll need to decide what type of coverage you want: Original or Advantage. As part of your full financial picture, health insurance planning in Phoenix or Flagstaff makes sense.
The ultimate goal is to save you money.
Estimate how much your healthcare costs will be
Rising healthcare costs can be problematic if you aren’t certain how to estimate your health costs moving forward. It’s estimated in 2022 that an average 65 year old retired couple may need around $315,000 saved (after tax) to cover health care costs in retirement. How do your savings weigh in to compete?
If you want to know more about what’s covered in each plan and how much money they cost, talk with a financial advisor in Flagstaff or Phoenix who can help you choose a plan that best suits your budget and needs.
Decide if you need or want extra coverage
Deciding what type of health insurance is right for you and your family is a personal choice. You should consider how long you have left until Medicare eligibility, the health of those in your household, and your financial situation.
If you’re healthy now but want to be sure that younger family members are covered with quality coverage, consider adding a Medicare supplement plan with an appropriate level of benefits, which may include prescription drug coverage as well as hospital and physician options.
Plan ahead so everyone gets the care they need without breaking the bank! Our financial advisor will be able to help you make that important decision.
Medicare can work with other insurance, but there are rules.
Each type of coverage is referred to as a “payer.” These payers can be Medicare, Medicaid, retiree coverage, or a group health plan. When you have more than one payer, “coordination of benefits” rules apply, which determines who pays first.
- Primary payer pays what the amount owed on your bills first
- Secondary payer (supplemental payer) can pay the remainder pay
- In some cases, there might be a third payer
Because your situation is completely unique, ask us your questions so that we can help align you with the right plan.
For example, let’s say your retiree coverage or group health plan is the secondary payer. In this case, you may need to enroll in Medicare Part B before they will cover costs. If the insurance company does not pay within 120 days, Medicare may be billed by your doctor or healthcare provider.
Medicare could make a conditional payment, and later recover any payments that should have been made by the primary payer.
Make the most of your healthcare options
Because Medicare offers you many options, understanding your options is an integral part of planning for Medicare open enrollment. Give our team of financial advisors a call to compare the different plans available and decide what is best for you.
If you decide to change your plan outside of open enrollment, it may cost more than doing so during your open-enrollment window. If you enroll in a Medicare Advantage or Medicare Part D plan during this time, you might be eligible for special discounts on premiums, copays, and deductibles. Let us know what you’re leaning towards to see if we agree.
Dates of open enrollment differ for health insurance providers who can change their offerings and alter plans. Consider what you’re looking for in a health insurance plan to make an informed decision.
Work with Ascendant Financial Solutions
If you are looking for more information about health insurance and how it can protect you from high-cost medical bills, we would love to help! We have a wealth of resources to help you make informed decisions within your full financial scope, including retirement health insurance coverage.
Use this Financial Fitness Fall Checklist quick guide to plan with organized actionable steps.
