Navigating Medicare: How to Choose The Best Coverage for Your Needs

As you approach retirement age, one of the most important decisions you’ll have to make is selecting the right Medicare Coverage.

With so many healthcare options available, it can be overwhelming to navigate the Medicare system and choose the best plan for your needs and budget. Below, we’ll take a look at some key factors to consider when selecting your plan. Here’s what you need to know.

The Current Healthcare Crisis

In Iowa and across North America, it’s expensive to get sick.

A Nationwide survey revealed 60% of U.S adults said they were “terrified” of what a global health care crisis might do to their retirement plans, and 68% believed there would be a market crash in the next five years.

Other findings include:

  • As a result of the pandemic, 14% dipped into an emergency fund, 26% paid off debt faster, and 31% slowed down or paused payments on loans.
  • Of those surveyed, only 35% participated in a health savings account plan. Most of those, 61%, plan to use it for current health expenses.

Respondents also said situations that most worried them when it came to retirement planning were inflation (36%) while Social Security running out of funds was second (28%.)

Average Healthcare Costs

On the Affordable Care Act exchanges, the average unsubsidized, high-deductible silver plan premium for a 60-year-old couple is more than $1,900 a month in 2023, according to the Kaiser Family Foundation. Some early retirees claim Social Security at 62 to help cover health insurance costs before they become eligible for Medicare at age 65. But the move that helps them in early retirement will wind up shortchanging them in late retirement, as their permanently reduced payments may not go far enough to cover ever-escalating medical costs. What’s more, although premium changes vary quite a bit from state to state, 2023 will mark the first time in several years when benchmark premiums are increasing on average nationwide.

KFF also estimated the average 40-year-old will pay $456 for a silver benchmark premium in 2023 before accounting for the subsidy (a 4% increase from $438 in 2022). Bronze plan premiums have similarly increased by about 4% and gold plan premiums are mostly steady at 2%.

Understanding The Basics

Medicare is a federal health insurance program available to people who are 65 or older, or who have certain disabilities or chronic conditions. The program is divided into four parts:

  • Part A: Hospital insurance, which covers inpatient care in hospitals and skilled nursing facilities, as well as hospice care and some home health care.
  • Part B: Medical insurance, which covers doctor visits, outpatient care, preventive services, and medical equipment.
  • Part C: Medicare Advantage, which allows you to receive all of your Part A and Part B benefits through a private insurance company.
  • Part D: Prescription drug coverage, which can be added to your Part A and Part B coverage through a private insurance company.

If you opt for Medicare Advantage, you’ll receive your Part A and Part B benefits through a private insurance company. These plans may also include extra benefits, such as dental, vision, or hearing coverage. Choosing this option often require you to use healthcare providers within their network.

If you choose Original Medicare (Part A and Part B), you may also want to consider purchasing a supplemental insurance policy (Medigap) to help cover out-of-pocket costs.

Be Mindful of Deadlines

It’s important to note that there are specific enrollment periods for Medicare. Including the Initial Enrollment Period when you turn 65. To help avoid getting behind on your Medicare coverage, keep track of important deadlines.

  • The Annual Enrollment Period starts October 15 through December 7 each year. During these periods, you can enroll in or make changes to your Medicare coverage.
  • From January 1 to March 31, Medicare offers the Medicare Advantage Open Enrollment Period (MA OEP). During this time, you can switch to a different advantage plan or return to original Medicare and enroll in Part D.

In Iowa, there are several Medicare Savings Programs available to assist with the costs of premiums, deductibles, and coinsurance. These programs are based on income and can provide significant financial assistance to those who qualify. Understanding the basics of Medicare can help you make informed decisions about your coverage to help ensure that you’re getting the most out of the program.

Choosing the Right Coverage

Now that you have a basic understanding of the different parts of Medicare, let’s dive into some key factors to consider when selecting the right coverage for your needs.

1. Your Health Needs

Consider the types of medical services and treatments you’re likely to need in the coming years. This includes things like prescription drugs, health care specialists, or chronic condition management. Some plans may offer more comprehensive coverage in these areas, while others may be more limited.

2. Your Budget

Think about how much you can afford to pay for your plan. This includes your monthly premiums, deductibles, and out-of-pocket costs. Medicare Advantage plans, for example, often have lower premiums but may require you to pay more out of pocket for certain services. It’s always best to review these small details before choosing a plan.

3. Provider Networks

Make sure your preferred doctors, hospitals, and healthcare providers are included in the plan’s network. If you have specific healthcare needs or live in a rural area, you may need to consider a plan with a larger network.

4. Prescription Drugs

If you take prescription drugs, make sure the plan’s formulary covers your medications. Some plans may requires you to pay more for certain drugs or may not cover them at all.

5. Extra Benefits

Some Medicare Advantage plans may offer extra benefits. This includes dental, vision, or hearing coverage. Consider whether these benefits are important to you and whether they justify the higher cost of the plan.

Navigating Medicare can be a complicated process. If you’ve reviewed the tips and still feel unsure about which plan is right for you, seeking help from a professional can provide much-needed clarity.

Getting Help

Navigating Medicare can be a complex process, and there’s no one-size-fits-all solution. Fortunately, there are resources available to help you make informed decisions about your coverage. The State Health Insurance Assistance Program is a free counseling service available in Iowa. They can provide personalized assistance with selecting and enrolling in Medicare.

Additionally, working with a Fiduciary advisor who specializes in Medicare can help you compare different plans and help find the best coverage for your needs. At Johnson Wealth and Income Management, our experienced team can help you navigate Medicare’s complexities and compare plan options.

As Fiduciary advisors, our top priority is always to act in your best interest. This means that we provide objective and unbiased advice that is solely focused on helping you achieve your Medicare goals. We take the time to understand your health care needs and budget before recommending any options.

Final Thoughts

Choosing the right Medicare coverage requires careful consideration of your health needs and budget. By taking the time to understand your options and seeking out assistance from local resources, you can make an informed decision and feel confident in your coverage.

Johnson Wealth and Income Management is an Iowa-based Fiduciary firm that is here to help all Iowans achieve a secure financial future. We understand that navigating through the ever changing healthcare system can be frustrating. That is why we are here to help ensure you’re always getting the advice and guidance you need.

If you have additional questions of Medicare coverage, set up a complimentary strategy session by contacting us here today.

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