How to Build a Medicare Strategy for Retirement

Medicare takes a little time to understand. As you approach age 65, familiarize yourself with its coverage options, costs, and limitations. Certain features of Medicare can affect your health care costs and coverage in retirement.

Some retirees may do okay with original Medicare (Parts A and B). Others might find it lacking and decide to supplement original Medicare with Part C, Part D, or Medigap coverage. In some cases, that may mean paying more for health care than you initially figured.

Medicare Part A and Part B: What They Cover and What They Cost

Part A is hospital insurance and covers up to 100 days of hospital care, home health care, nursing home care, and hospice care. It is usually provided at no charge. Part B covers doctor visits, outpatient procedures, and lab work — and you pay for it through monthly premiums.

It is best to prepare for the copays and deductibles linked to original Medicare. In addition, original Medicare does not cover dental, vision, or hearing care, prescription medicines, or health care services outside the U.S. It pays for no more than 100 consecutive days of skilled nursing home care. These out-of-pocket costs may lead you to look for supplemental Medicare coverage.

Medigap and Medicare Supplement Insurance

Medigap policies help Medicare recipients with some of these copays and deductibles. Sold by private companies, these health care policies can pay a share of certain out-of-pocket medical costs beyond what original Medicare covers. You must have original Medicare in place to purchase one. Note that Medigap policies sold today do not include prescription drug coverage.

Medicare Part D: Prescription Drug Coverage

Part D plans cover some — though not all — prescription drug expenses. Monthly premiums are averaging $40 this year for these standalone plans, which are offered by private insurers. Part D plans currently have yearly deductibles of no more than $590.

Building Your Medicare Strategy

Creating a Medicare strategy is an integral part of retirement preparation. Should you try original Medicare for a while? Should you enroll in a Part C Medicare Advantage plan to manage overall out-of-pocket health care expenses? There is also the matter of elder care and the potential need for interim coverage if you retire before age 65.

Discuss your concerns about Medicare in your next conversation with your financial professional.

If you have questions about this topic, let's talk.

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Sources:

_{1. Medicare.gov, 2024}

_{2. Medicare.gov, 2024}

_{3. Medicare.gov, 2024}

_{4. Medicare.gov, 2024}

_{5. CMS.gov, 2024}

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‍_{Brent Forrest & Associates, LLC. dba Wela Financial Advisory (Wela) is a registered investment adviser. The information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. This article and images may have been enhanced by utilizing artificial intelligence (AI).  Wela may discuss and display, charts, graphs, formulas which are not intended to be used by themselves to determine which securities to buy or sell, or when to buy or sell them. Such charts and graphs offer limited information and should not be used on their own to make investment decisions.}