Planning for Medicare

[JeffB138886]

Hello Everyone

I will turn 65 next March and want to get prepared for Medicare. I am interested in anyones input or experience. I have started researching a bit but there seems to be a lot of searching to do so I thought I might narrow it down a bit. I do not work and do not expect to, I plan to delay SS benefits for as long as it makes sense and I am not married. I will have a lump sum of money ( retirement related ) that can be used for insurance / Medicare, I need to get more information but I do know that it must be used by the time I turn 75. A few of my questions are: how do I pay them if I am not collecting? Are there strong feelings for plan C or Medigap or something else? Recommendations?

thank you in advance for any information you care to share.

Jeff

[JamesP954142]

Sounds like you have a separate pool of employer provided dollars which can be used for medical expenses.  Check and see whether Part B premiums and gap policies are reimbursable.  You may need to submit reimbursement documentation similar to an FSA to your program for reimbursement of those items they will cover.  As to Part C/Advantage plans, one of the biggest concerns I had was "network" issues due to the fact that we spend half the year in FL and 1/2 up north. While some advantage plans have loose associations/networks around the country, traditional has no network issues.  If they take medicare you're covered. If you plan to travel a lot, keep this in mind. If your pool of funds has a spend down by age 75, perhaps get a more gold plated gap policy.  You can always "step down" in the comprehensiveness of gap policies but may incur medical underwriting if you decide to step up.

As to paying, Medicare will bill you if you don't have your SS turned on.  Part A is free and automatic at 65.  The insurance company you buy the gap policy at will also bill you or will a ach/direct debit your checking account.   For Advantage Plans, also keep in mind their costs, offerings and decision making is always up to them and subject to change.  Traditional Medicare is somewhat more predictable thru government edict.  Gap policies are partially controlled by government (what must be in each lettered plan) and part controlled by competition among the insurance companies selling plans in your state. 

[cat0w]

@JeffB138886 

My question for you is, why do you want to take a lump sum when you retire? Do you have a retirement plan, and can you get a monthly payment from that instead of the lump sum?

I receive my Social Security and a monthly check from my retirement plan. With both I live very comfortably. I have been retired for fifteen years. I have received more with a monthly check than I would have gotten had I asked for a lump sum. 

I have seen two family members make that mistake. They took a lump sum at retirement.

[GailL1]

You are right - Taking a lump sum of anything at retirement isn't a good idea because of Medicare IRMMA premium consequences - perhaps he meant to say that he is rolling it over to some other retirement account like an IRA.

[GailL1]

Read, listen or even view "Medicare and You" - that's a start.  You need some basics of knowledge to even ask questions - this booklet covers a lot of the basics.

Medicare.gov - Medicare and YOU 

How to pay your Medicare Premiums

Medicare Part C (Medicare Advantage)  OR  a Medigap OR neither is an individual decision - 1st thing is to understand the differences in them in how you decide to get and use your Medicare Benefits.

All this is covered in the Medicare and You - 

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[JeffB138886]

I do not receive the lump sum, it would be similar to an HSA but it is not one. It has to do with the company and an adjustment to the retirement program so I can use it for premiums or lose it.

Do you like part C? or Medigap? or something else, why or why not. I understand it is an individual decision but I am interested in the groups opiions or experience. I will read the links you attached.

Thanks

[Tonster521]

@JeffB138886 It sounds like you may have a benefit from a 401 H Plan. Years ago when Defined Benefit Plans were more common, employers may provide certain medical related benefits via a Section 401 H Plan. Without getting too deep in the details which includes funding strategies, Section 401 H provided many advantages to both the employee/retiree and employer. I am not up to date with current 401 H provisions. However, in the past, you were able to use 401 H benefits to pay for insurance premiums. I do not know if Medicare Part B contributions are considered insurance premiums. You may research at irs.gov or try calling the IRS. It is difficult to get through on the phone. With regard to Traditional Medicare with a Medigap and Drug policy versus Medicare Advantage (Part C), you may find the Part C currently provides more benefits including some dental, some vision, gym memberships, and some transportation benefits (to and from doctors' office). However, with Part C, you may have less physicians and hospitals to elect inasmuch as many Part C are HMOs or PPOs. If you live in or near a large urban area (versus rural), you may find your current physician is already in a Part C network. If so, Part C may be an advantage for you since some Part C Plans require little or no monthly contribution. However, be aware that Part C Plans require daily  co pays if hospital confined. That varies from Plan to Plan and may amount to $250 per day for 6 days. Generally, it is equivalent to the Medicare Part A deductible. You should be able to budget for that or use 401 H benefits if that is the benefit you need to expense by age 75.

[JeffB138886]

Thank you for the reply that helps. I am sorry I confused thing bringing up the lump sum, I only wanted to indicate that I have funds to use, incase that would 

alter someones recommendation. I am starting to read the Medicare booklet so that should help. Are you saying there are part C that have no cost? 

I do not have a doctor, I haven't had the need for one plus I am not fond of them so I don't think the in or out of network will be a big concern.

Thank you for the help.

[Tonster521]

@JeffB138886 First, all insurance benefit plans have costs. The question to be answered is what are the amounts you need to pay. Medicare Advantage  (Part C) monthly contributions will vary from plan to plan. Depending where you reside, those monthly contribution may range from zero ($0.00) to $100.00 or more. Generally, the lower monthly contributions are HMO type plans and the higher monthly contributions are PPO type plans. Also, you need to look at plan specifics such as deductibles, co pays, and coinsurance and stop loss limits. All of these features will factor into your costs. I previously used a hospital confinement to illustrate daily co pays which are your costs. For example, if those co pays added up to $1,500 during a calendar year, you may state that it cost $125 per month ($1,500 divided by 12). Of course, you need to add any additional co pays or coinsurance that a plan may require. So,comparing plans is an analytical challenge. I am adding another link for your review https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance You may click on Part C info and add your zip code to search for plans in your area. However, you still need to compare monthly contributions, deductibles, co pays,coinsurance, and stop loss limits to understand your costs. For some folks, this is as clear as mud. So, another approach is to find an agent in the Medicare business and work with that individual or organization. If you value independence and selecting physicians, I have found Traditional Medicare with a Supplement and Drug Plan is a great approach. On the other hand, if you are more inclined to a managed care approach, Medicare Advantage (Part C) is also a great approach. Hope this helps.