On this episode of the Ready for Retirement podcast, James provides listeners with a broad but detailed overview of Medicare. Medicare is the federally maintained health care plan for all qualifying Americans aged 65 and up.
There is always something in the news about Medicare and it can seem daunting to understand all of the different parts and supplemental plans, but James breaks down the basics during this episode.
Medicare Part A is also known as hospital insurance, covering inpatient and skilled nursing facility treatments as well as related prescription drugs for a specified length of time. Medicare Part B is also known as medical insurance, covering outpatient treatment by healthcare providers and preventative care. Medicare Part D is prescription drug coverage and is often paired up with a Medicare Supplement plan (Medigap).
Medigap plans coupled with Medicare Part D is one option for reducing your risk in the case of medical emergencies. These plans typically have higher premiums with lower out of pocket costs and are good for folks with health concerns or pre-existing medical conditions.
Medicare Advantage plans are similar to employer-sponsored healthcare plans and typically feature lower premiums and higher deductibles and copays. These plans are good for people who are in good health and do not anticipate needing medical care outside of their network or by specialists.
James recommends that people looking for more comprehensive information to refer to Ashby Daniels’ book “Medicare Simplified.”
- What is Medicare?
- A federal health care plan for those aged 65+
- Medicare Part A
- Hospital insurance
- Covers inpatient and skilled nursing facility treatments to a certain extent
- Hospice care
- $0 monthly premium for those who paid into the program during their working time
- Medicare Part B
- Medical insurance
- Covers healthcare providers and preventative care
- $144.60 or higher monthly premium (depending on income)
- When to enroll in Medicare
- The initial enrollment period is the 7 months surrounding your 65th birthday
- The special enrollment period is the 8 months after you stop working
- The general enrollment period is every January 1-March 31
- If you miss your initial or special enrollment period, you could have to pay penalties
- Ways to protect yourself against risk
- Medigap plans
- Higher premiums but lower out of pocket expenses
- Standardized in 47 states
- No geographic restrictions
- No specialist referrals needed
- No prescription drug coverage, so it is often coupled with a Medicare Part D plan
- No dental or vision coverage
- You can transfer to a Medicare Advantage plan during a certain timeframe
- Who should consider Medigap?
- Those willing to pay more in premiums
- Those with health concerns
- Those who want to be able to choose their doctor and not have to receive a referral for a specialist
- Medicare Advantage plans
- Similar to employer-sponsored plans
- Lower premiums but higher copays and deductibles
- Usually includes prescription drug coverage
- Usually includes routine dental and vision coverage
- Sometimes offers wellness plans
- Can potentially change every year
- Increased costs for out-of-network visits
- Not able to transfer to a Medigap plan at will
- Who should consider Medicare Advantage?
- Those who liked their work health plan
- Those who like their primary care physician
- Those who are in good health right now
- Medigap plans
0:23 – Introduction to the episode
0:59 – “Medicare Simplified” by Ashby Daniels
1:30 – What is Medicare?
4:06 – Two supplemental plans that could fill in the gaps
4:33 – Medicare Part A
5:40 – Medicare Part B
6:58 – The differences between Medicare Part A and Medicare Part B
9:01 – When to enroll in Medicare
12:33 – Medigap plans
17:48 – Who should consider Medigap plans
19:27 – Medicare Advantage plans
23:50 – Who should consider Medicare Advantage plans
25:12 – Things that might not be covered at all
26:04 – Takeaways from this episode