Understanding Medicare PC1528-Print

RETIREMENT PLANNING

MEDICARE

Understanding Medicare

One of the most imperative topics relating to retirement is the cost of healthcare. While most pre-retirees know they will face increased medical expenses, very few have factored in the impact it will have on their retirement income. Many also mistakenly believe Medicare will cover the cost of long-term care. That’s why it is crucial to get the facts now and understand why it is important to include healthcare

coverage as part of your retirement planning. UNDERSTANDING MEDICARE COVERAGE OPTIONS

WHILE MOST PRE-RETIREES KNOW THEY WILL FACE INCREASED MEDICAL EXPENSES, VERY FEW HAVE FACTORED IN THE IMPACT IT WILL HAVE ON THEIR RETIREMENT INCOME.

Medicare is the federal health insurance program for people age 65 or older. Certain people younger than age 65 with disabilities can also qualify for Medicare. The program is designed to help with the cost of healthcare, but it doesn’t cover all medical expenses or the cost of most long-term care. Rules and coverages vary by state. MEDICARE COVERAGE PLANS

PLAN

COVERAGE

OUT-OF-POCKET COSTS

Part A: (Hospital insurance)

Inpatient hospital care or skilled nursing facility (following a hospital stay), some home healthcare and hospice care. Services from doctors and other medical providers, outpatient care, home healthcare, durable medical equipment, and some preventive services.

Deductibles, coinsurance and copays.

Part B: (Medical insurance)

Monthly premiums, deductibles, coinsurance and copays.

Part C: (Medicare Advantage plans) Part D: (Prescription Drugs)

Private single provider option.

Various costs determined by insurers.

Brand name and generic drugs.

Monthly premiums, deductibles and copays.

When you apply for Medicare, you have choices for how you receive and pay for your coverage.

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THE MOST GLARING GAP IN MEDICARE IS THAT IT ONLY PROVIDES VERY LIMITED FINANCIAL ASSISTANCE FOR LONG-TERM CARE. BRIDGING THE GAP While Medicare can supplement other insurance programs, such as retiree benefits from a previous employer, it is unlikely to cover the full cost of your healthcare expenses. Medicare does not cover the cost of vision and dental care, or out-of-pocket expenses such as monthly premiums and co-payments. The most glaring gap in Medicare is that it only provides very limited financial assistance for long-term care. According to the Department of Health and Human Services, 70% of Americans turning age 65 will need long-term care at some point in their lives. MEDIGAP INSURANCE

A Medicare Supplement Insurance (Medigap) policy, sold by private companies, can help pay some of the health care costs original Medicare doesn’t cover, like copayments, coinsurance, and deductibles. Some Medigap policies also offer coverage for services that original Medicare doesn’t cover, like medical care when you travel outside the U.S. LONG-TERM CARE INSURANCE Long-Term Care Insurance is a potential solution to protect your lifestyle and financial independence during retirement. Policies cover a wide range of services: home health care, assisted living and skilled nursing facility care. It’s best to purchase long-term care insurance protection early in your retirement or even before you retire. Premiums are much more affordable at a younger age.

WHAT TO DO NEXT

  Find out when you need to enroll

  Understand your coverage options when you enroll   Keep your Medicare card in a safe place after you enroll   Select Medigap coverage based on your personal health situation   Incorporate Medicare discussions in your retirement planning conversations with your advisor

  Know your Medicare rights

Contact a Commerce Trust Advisor to learn more about how to prepare for healthcare costs in retirement to protect your financial well-being. 1-855-295-7821 | commercetrustcompany.com

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