Outside the Box

July 22, 2020, 7:17 p.m. EDT · CORRECTED

5 things to know about health care in retirement

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By CD Moriarty

Most people receive Medicare Part A (inpatient hospital coverage) for a discount if they have accumulated the qualified 30 quarters of work and for free if they have 40 quarters. An earlier version gave the incorrect number of quarters needed to be eligible for free Part A coverage.

Waiting for Medicare to cover your retirement health-insurance expenses? Look again. Figuring out Medicare is a minefield. 

This is not like your employer’s two or three insurance options. There are many more components and Medicare planning comes together more like a puzzle. Compounding the issue, health care is so personal that there are no cookie-cutter answers; each individual’s needs are unique.

This is what’s essential to know now — whether retirement is a few years off or early retirement options may be on the table today.

Most people receive Medicare Part A (inpatient hospital coverage) for a discount if they have accumulated the qualified 30 quarters of work and for free if they have 40 hours. Yet that is only one piece of health insurance. Each piece of Medicare coverage has its own deductible as well as coverage. They all have different fees as well

For example, what you are charged for Part B is based on income. The average monthly premium for 2020 is $144.60. There is not a family or couple discount. And starting at age 65 you must pay for it — even if you are not collecting Social Security yet.  

Plan for it. Be ready. 

Here are the Medicare basics:

Part A is hospital insurance for inpatients and is free in most cases.

Part B is Medical for doctors’ services whether on an inpatient or outpatient basis. Cost varies by income.

Part C is premium-paid coverage through private plan. Cost varies by plan and coverage.

Part D is prescription coverage through Medicare and a private insurance company. Co-pays and coverage varies by plan. Understand your prescription needs.

Additional costs come beyond Medicare coverage. They include dental care, eye care, along with deductibles and co-pays. Many people assume long-term care costs of assisted living or home care are covered by Medicare, but this is not true.

Signing up is easy. You can do it online

However, if you don’t sign up during a window around your 65th birthday, you will be charged a penalty when you finally do. If you miss this deadline, your monthly premium will increase as much as 10% for the rest of your life.  

Even if you have been collecting Social Security since age 62, you must sign up for Medicare separately. If you will be waiting to collect Social Security until age 67 or even 70, you still must sign up at age 65.

If you are working beyond age 65 and have good health insurance, you still need to take think about Medicare.  You may delay signing up as long you as have Part B coverage through your employer.  

But the employer coverage and Medicare exceptions may mean you need both.  One insurance becomes your primary insurance and the other one your secondary coverage.  Your current Human Resource person or insurance provider will be able to help. 

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