Meridian Blog

In our recent webinar, Sarah Irving of Meridian Financial Partners and Angela Windett of Steinlage Insurance Agency discussed practical insights to help individuals nearing or in retirement make informed decisions about Medicare. Here are five key takeaways from the session:

1. Understand the Different Parts of Medicare

Medicare is divided into multiple parts, and it’s important to understand what each one covers:

• Part A: Hospital insurance, generally premium-free if you’ve worked 10 years.
• Part B: Outpatient and doctor visits, which require a monthly premium and have penalties for delayed enrollment if not covered by other creditable insurance.
• Part D: Prescription drug coverage, also subject to late enrollment penalties.
• Medicare Advantage (Part C): An alternative to Original Medicare offering additional benefits, but with network limitations.
• Medigap: Supplement plans that cover out-of-pocket costs not paid by Original Medicare, but do not include drug coverage.

2. Timing Your Enrollment Is Critical

Missing key enrollment windows can lead to permanent penalties. Your Initial Enrollment Period begins three months before your 65th birthday and ends three months after. If you delay enrollment without qualifying creditable coverage (like employer-sponsored insurance), you may face late enrollment penalties for Parts B and D.

3. Know What Counts as Creditable Coverage

Not all employer insurance counts as creditable. If you’re still working at 65, ensure your employer coverage meets Medicare’s creditable criteria, especially for Part D. Retiree health plans or COBRA often do not qualify, which can lead to penalties.

4. Your Income Affects Your Premiums

Medicare premiums for Part B and Part D are subject to IRMAA—an income-related monthly adjustment. This is based on your tax return from two years prior. Planning for income fluctuations or life-changing events (such as retirement or divorce) may allow you to file an appeal to lower these premiums.

5. Medicare Advantage vs. Medigap: Choose Wisely

The choice between Medicare Advantage and Medigap impacts your access to care, costs, and flexibility:

• Medicare Advantage may offer lower premiums but includes provider networks and copays.
• Medigap provides broader access to providers and more predictable costs, but higher premiums.

Consider your health needs, travel plans, and preferred doctors when making this decision. You can’t be denied Medigap coverage during your initial enrollment window, but you may be subject to underwriting later if you switch.

Final Thoughts

Medicare can be complex, but avoiding common mistakes can save you thousands over time. Consulting with a financial advisor and a licensed Medicare insurance company like Steinlage can help ensure you’re making the best choices for your retirement healthcare needs.