Medicare can feel complicated when you first enroll. But even after you’ve been on Medicare for several years, there can still be questions. For example:

Do the choices you made when you first enrolled still fit your life today?

Some people think that Medicare is a decision you make once and never think about again. But your health can change. Your prescriptions can change. Doctors may move in or out of networks. Plan costs and coverage can change from year to year.

That’s why an occasional Medicare checkup can be worthwhile.

Before we go further, it’s important to note that Shadowridge does not sell or write Medicare plans, and this article is not a recommendation for any particular Medicare coverage or insurance product.

Instead, consider this a starting point for understanding some of the questions you may want to ask along the way.

Start With the Right Questions

Before comparing individual Medicare options, it can help to understand your own situation.

Ask yourself:

• When am I eligible for Medicare, and what enrollment periods apply to me?
• How does my current employer coverage coordinate with Medicare (if applicable)?
• Which doctors, specialists and hospitals are important for me to keep?
• What prescription medications do I currently take?
• How could my income affect what I pay for Medicare?

The answers can help you understand which Medicare considerations deserve your attention.

Don’t Forget How Medicare Fits Into Your Budget

Medicare coverage isn’t necessarily free, and the way premiums are paid can depend on your circumstances.

For people already receiving Social Security benefits, your Medicare premiums may be deducted from your benefit payments. People who are not yet receiving Social Security may receive a Medicare premium bill directly.

Private Medicare plans can also charge separate premiums. When comparing these, rather than considering only the advertised premium, be sure to look at the broader financial picture. Deductibles, copayments, coinsurance, prescription costs, provider networks and potential out-of-pocket expenses can add up. A plan with a lower monthly premium isn’t automatically the lowest-cost choice, depending on your circumstances.

Watch the Enrollment Deadlines

Another area to be aware of is timing. Depending on your circumstances, delaying enrollment in certain parts of Medicare can result in late-enrollment penalties that you’ll carry for life. Not good for missing a deadline! So please don’t assume that one type of coverage automatically allows you to delay Medicare enrollment.

Rules can also differ depending on whether you’re still working, covered through an employer, transitioning from employer coverage or using other forms of health insurance.

If you’re approaching Medicare eligibility while still working, consider verifying how your existing health and prescription coverage coordinates with Medicare before making an enrollment decision.

Your Income Can Affect Medicare Costs

Here’s one that often surprises many clients. Medicare and tax planning overlap.

Higher-income Medicare beneficiaries may pay an Income-Related Monthly Adjustment Amount, or IRMAA, in addition to their Medicare premiums.

One reason this can come as a surprise is that the IRMAA determination looks back at income reported on your tax return two years ago! (Do you remember what you were doing two years ago? I know – I find that challenging, too. But the IRS doesn’t find it difficult at all.)

That means financial events such as realizing capital gains or completing a Roth conversion as you are nearing retirement may be worth considering in the context of future Medicare costs.

There are also circumstances in which someone whose income has decreased because of certain life-changing events may be able to request the repeal of an IRMAA determination.

This is one reason Medicare decisions shouldn’t necessarily be viewed as separate from the rest of your retirement, income and tax planning.

Already Enrolled? Give Medicare an Annual Checkup

Being enrolled in Medicare doesn’t mean you should automatically keep everything as-is year after year.

Consider asking yourself:

• Have my prescriptions changed?
• Are my preferred doctors and specialists still participating in my plan’s network?
• Have my premiums or other potential out-of-pocket costs changed?
• Has my health changed in a way that affects what I need from my coverage?

If something has changed, it may be worth reviewing the options available to you during the applicable Medicare enrollment period. Remember, reviewing your coverage doesn’t mean you necessarily need to change it. Sometimes the review simply confirms that your current coverage continues to meet your needs. And that’s worth knowing, too.

Pay Particular Attention to Prescription Coverage

Prescription drug coverage deserves its own annual review. Plan formularies, drug tiers, pharmacy arrangements and costs can change. Your own prescriptions may change as well.

During Medicare’s Annual Enrollment Period, you can use the official Medicare Plan Compare tool to enter your medications and compare available options based on your circumstances. It’s a truly helpful tool to help you understand what (if anything) has changed from year to year.

Know Where to Find Reliable Medicare Information

Clients often ask me where they can find reliable resources, rather than depending on questionable sales literature. It’s a smart question! Here are a few reliable resources:

Medicare.gov
The official federal Medicare website includes information about coverage, enrollment and Medicare’s plan comparison tools.

State Health Insurance Assistance Program (SHIP)
SHIP programs provide free Medicare counseling and assistance. Programs are available throughout the country.

1-800-MEDICARE
Medicare’s official telephone assistance line can answer questions about Medicare coverage and enrollment.

Social Security Administration
Social Security provides information regarding Medicare enrollment, premium adjustments and IRMAA-related matters.

Medicare & You
The official Medicare handbook provides detailed information about Medicare benefits, rights, enrollment and coverage.

Medicare Planning Is Part of Retirement Planning

Perhaps the most important takeaway is that Medicare probably isn’t a one-and-done decision.

As your health, income and circumstances change, your coverage may need to change, too. The good news is that it can.

Review your prescriptions and coverage periodically. Pay attention to changes in your income and how they could interact with Medicare costs. And use official resources when you need current information about the program.

Doing this periodic “checkup” for your coverage can bring you peace of mind as your lifestyle, needs, preferences, and health evolve and change over time.

This material is provided for educational and informational purposes only and is not intended as individualized investment, tax, legal or insurance advice. Shadowridge does not sell or write Medicare insurance plans. Medicare rules, costs, coverage and enrollment requirements may change. For current Medicare information and information specific to your circumstances, consult Medicare.gov, the Social Security Administration, your State Health Insurance Assistance Program, and/or an appropriate qualified professional.

 

 

 

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