My clients often report Medicare as the most confusing aspect of their retirement financial picture. With all of the options available through Medicare, just deciding on which coverage to elect can get someone’s head to spin.

Understanding the basics can help you feel more comfortable as you sort through the decision process. In this article, I’ll cover some of the main aspects of Medicare as well as providing some resources where you can learn more.

When can you sign up? Most people will become eligible for Medicare at age 65 and can sign up as early as three months prior to their 65th birthday and as late as three months after. If you apply prior to the month in which you turn 65, coverage should begin the first day of your birthday month. Otherwise, your coverage should begin the month after you apply.

If you miss this initial seven-month window, you may have your benefit start date delayed and/or face additional costs.

Some people may qualify for Medicare earlier due to a health condition or disability while others with group coverage through their employer might be able to delay applying.

What are the essentials on coverage options?

Part A – Medicare Part A covers hospital stays, some of the care you receive while in the hospital, and, in some cases, can cover a portion of skilled nursing and hospice care.

Part B – Medicare Part B covers some of what Part A doesn’t and includes some preventative and medically necessary services. Those can include doctor’s visits, blood tests, surgeries, and items such as wheelchairs.

Part D – Medicare Part D provides prescription drug coverage. Part D has a list of prescription medications that are covered and tiered pricing for those medications.

Part C – Medicare Part C is essentially an option that allows you to combine Parts A and B as well as the option to include Part D.

What are the costs?

Part A – While there is an annual deductible and some other potential costs, Medicare Part A is free for anyone who has worked (or who has a spouse who has worked) for 10 years (40 quarters). Those who have not worked for 40 quarters may pay a premium in order to get Part A coverage.

Part B  – The premiums for Medicare Part B are based on your annual income. In 2019, the premiums will be according to the chart.

As you might expect, you’d also have a deductible and some benefits for which you’d have co-insurance.

Part D – Medicare Part D’s costs will vary based on the plan you purchase, the medications you need, and where you go to get your medications. This area can be extremely complex and confusing. Make sure to fully evaluate your coverage options before you apply and understand your benefits before getting your medication.

Other Plans – Medicare Advantage plans and Medigap (supplemental) policies offer additional options to the standard plans. These plans can combine the coverage offered through Medicare and/or provide you with additional coverage to fill in some of the gaps in Medicare (deductibles, co-pays, and additional services).

Resources – You may want to start by contacting your State Health Insurance Assistance Program (SHIP). SHIP offers free assistance to help individuals and couples sort through their Medicare options. You can find your local office here: Hiptacenter.org.

You can also find additional information at the Medicare website: Medicare.gov/your-medicare-costs/index.html

UnitedHealthcare has a site with a PDF book and some videos that help explain the basics: Medicaremadeclear.com.

This column is for informational purposes only, and is not meant as specific advice to any individual. Partnership Wealth Management offers financial planning and wealth management services, with a long history of working with the LGBT community. Reach them at Partnershipwm.com or call 410-732-2633.

A Quick Guide to Medicare Costs 2017 Modified Adjusted Gross Income … Premium

Up to $85K single / $170K married $135.50

Above $85K to $107K single / $170K to $214K married $189.60

Above $107K to $133.5K single / $214K to $267K married $270.90

Above $133.5K to $160K single / $267K to $320K married $352.20

Above $160K to $500K single / $320K to $750K married $433.40

Above $500K single / $750K married $460.50

Figures from Medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html

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Author Profile

Woody Derricks, CFP®
Woody Derricks, CFP®
Throughout my nearly 20 years as a Financial Advisor, I have seen some of the best and worst markets in our history. That experience allows me to approach my clients with the knowledge of how the markets fit into their greater financial picture. At Partnership Wealth Management we help everyday people who have accumulated wealth make sense of what they have and work with them to maximize their financial opportunities in a relaxed, comfortable, and professional environment. While we help people from all walks of life, many of our clients are same-sex couples searching for a knowledgeable, LGBT-friendly financial advisor to help them with their unique financial planning needs. I am a CERTIFIED FINANCIAL PLANNER™ professional and have the Accredited Domestic Partnership Advisor(sm) designation. As a Registered Investment Advisor, we are not tied to any company’s investment products allowing us to provide unbiased advice by offering a wide array of investments and other products to our clients. Since 2001, I have been writing articles on financial planning for several regional newspapers and have been a guest speaker on LGBT financial issues for various local and national organizations. Additionally, I have conducted financial planning workshops for large corporations and government agencies. Non-Profit Work I believe that it is important to give back to the community and currently serve as the treasurer for FreeState Justice and as a co-founder/president of Paws for a Cause. I’m a current member of several LBGT, environmental, and local community groups. Personal My wife, Heidi and I enjoy camping, hiking, and traveling with our daughter, Elise, and our dogs, Fenway & Roxy. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.