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Medicare 101: Understanding Healthcare in Retirement

October 13, 2021

10,000 people are turning Medicare-eligible every day[1] and are looking for help from financial professionals in how to make the best decisions for themselves and their families.

Many people have the same questions when it comes to healthcare in retirement. We’re here to simplify and break down Medicare and retirement to help your clients make informed decisions. When it comes to planning for their healthcare and retirement, many of your clients might not even know where to start, which is why we’ve provided these Medicare basics.

When it comes to Medicare, a good place to start would be to introduce your clients to the enrollment options available to them.

Medicare Initial Enrollment Period (IEP)

During a client’s initial enrollment period, they are eligible to apply for benefits in any of the three months immediately preceding their 65th birthday month, the month of their 65th birthday, or any of the three months after their birthday. That is your client’s continuum seven months that they have during their initial enrollment period, if they’d like to enroll around their 65th birthday.

If your client would like to have coverage begin in the month they turn 65, it is best to have them apply a few months before, to make sure their coverage starts on time. A lot of people start coverage in their birth month and think it starts on their birth date. The standard for Medicare coverage is that it starts on the first day of the month of coverage.

7 month medicare enrollment period

Medicare costs

Medicare costs include multiple premiums and potential deductibles and copays. Your clients may be concerned that they may not be able to afford the growing costs of health care, especially because they may live longer. If your clients stick to their health care planning, they should be able to afford the Medicare coverage costs today, and over their lifetime.

There are generally two choices when selecting Medicare Coverage

Option 1: Original Medicare

What is Original Medicare? This option offers flexibility and choice. With this type of coverage, people can see any doctor or specialist across the US who accepts Medicare. This would include Medicare Part A + B, as well as Part D for your prescriptions. People who purchase Original Medicare also can purchase supplemental coverage, which is also known as Medigap coverage. The purpose of Medigap coverage is to help keep out-of-pocket costs down by covering hospital and medical deductibles and co-pays.

Option 2: Medicare Advantage

What is Medicare Advantage? Where option one provides flexibility, Medicare Advantage plans may provide more convenience. Medicare Advantage plans are also known as Medicare Part C. Plans like Advantage Plans may be limited to local networks of doctors and hospitals and specialists. They might also offer additional benefits like dental, vision, and hearing checkups that Original Medicare does not.

Which Medicare plan is right for your clients?

This will ultimately decide on a variety of factors, such as how much coverage they need, how much traveling out of their network they do, overall health, and their lifestyle. If your client likes to travel a lot and spends a lot of time out of network, the best option might be Original Medicare, as that option offers them access to any doctor or specialist across the United States and United States territories who accepts Medicare. They could then help supplement the additional costs with Medigap coverage.

Do you need to enroll in Social Security at the same time as Medicare?

A common question that comes up from clients is can you get Medicare without Social Security, and the short answer is yes. You can enroll in Medicare independently of filing for social security benefits. This would allow your client to wait until their full retirement age to file for social security benefits. Some people might also ask do you automatically get Medicare with social security? If you are already receiving benefits from Social Security, then you will automatically be enrolled in Medicare Part A and Part B on the first day of the month you turn 65.[2]

Additional resources on Medicare planning

There are a variety of other resources where you can direct your clients to help them out with their Medicare planning questions.

At Nationwide Financial, we’ve also written numerous blogs on Medicare that can be great resources to help your clients and their Medicare planning. Below are just a few of those blogs.

Key Takeaways on Medicare 101 planning

  • You can enroll in Medicare at any point the three months before the month of, and the three months after you turn 65.
    • Coverage does not start right away, so when you enroll, leave some lead time to make sure your coverage starts when you need it to.
  • For most people, Medicare is not free. There are some costs associated with coverage and care, just like your clients probably pay now.
  • There are two ways that most people get Medicare coverage: Original Medicare with supplemental Medigap coverage, or Medicare Advantage plans
  • You can be covered by Medicare before you take Social Security and vice versa

To hear a specific example on Medicare coverage, listen to Medicare 101: Anita’s Story here.

Sources and Disclosures

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    Nationwide and the National Council on Aging are separate and non-affiliated companies.

    This information is general in nature and is not intended to be tax, legal, accounting or other professional advice. The information provided is based on current laws, which are subject to change at any time, and has not been endorsed by any government agency.

    Nationwide and its representatives do not give legal or tax advice. An attorney or tax advisor should be consulted for answers to specific questions.