November 13, 2014

Planning for Medicare

October 15th - December 7th is open enrollment time for Medicare.  For many, Medicare planning is a confusing & daunting task.  We wanted to share some information for those approaching 65 years old who are trying to understand their options for healthcare (there is also relevant information for those already 65 whether on Medicare or not).

As there is so much to cover, we plan on writing a series of blog posts on the topic. We'll start with an overview of the Medicare system.

Alphabet Soup:

Let's begin with a breakdown of the terminology you'll hear when discussing, or reading about, Medicare:

Original Medicare:
Part A:  Think of this as your hospital coverage.  This provides coverage for in patient care, medically-necessary skilled nursing facility stays (see future blog post with more detail on this), and hospices.  There is no premium for most people.
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Part B:  Think of this as your primary coverage for doctors visits and other health care providers.  It covers outpatient care, home health care, durable medical equipment, and certain preventative services.  Premiums for this are income dependent and range from $104.90 - $335.70 per month (for 2014).

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Part D:  Prescription Drug Plans.  The premiums for these plans vary with some providing better coverage for brand name drugs vs. generic.  It is very important to research the plans available to find the right plan for you.  Not investigating the plans available can cost you hundreds or thousands of dollars a year in out of pocket costs.

There are a number of great resources for helping find the right plan for you, including  You can provide them with a list of your prescription drugs and which pharmacy you typically use to determine which plan is most appropriate for you.  This is something you should certainly review each year during open enrollment, especially if you are taking any new drugs.

The average costs for these plans range from $40-$110 per month (with additional premium charges for those in higher tax brackets).
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Medigap Policies:  These are also known as Medicare Supplemental plans (if you are fortunate enough to have a retiree medical plan through your employer it can essentially act as your Medigap policy).  They supplement your Original Medicare and will pay:

  • Medicare's deductible
  • Coinsurance costs
The average cost for these plans range from $60-$200 per month.

Part C:  Medicare Advantage Plans
Medicare Advantage plans are offered by private insurers and are localized plans (Medicare A & B are standardized plans at the Federal level).  Advantage plans often require you to utilize certain networks of doctor visits & hospitals (Original Medicare allows you to see any medical provider that accepts Medicare).   These plans can vary greatly in quality not only between states, but, within states.

Choosing the Right Plan For You

Essentially, you can get Medicare health care coverage in one of two ways.  Through Original Medicare by enrolling in Part A, B, D & a Medigap policy, or, by choosing a Medicare Advantage Plan that combines your coverage into one plan. 

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Making a choice between Original Medicare and Medicare Advantage Plans depends on each individuals health needs and budgets.  Because of the potential of out-of-network providers resulting in higher out-of-pocket costs, we tend to recommend Original Medicare for our clients.  The risk of needing to use out-of-network providers is especially high for those who spend winters down south, or enjoy traveling and therefore may need to access healthcare providers outside of their network.

Additional Resources:

Beyond working with your financial planner to design the right coverage for you, there are a number of resources available:

Centers for Medicare & Medicare Services (CMS):  800-MEDICARE (800-633-4227) or

Social Security Office:  National # 800-772-1213.  Or call your local office to set up an appointment.

Local Senior Center:  Senior centers often have resources or people to talk to who are well versed in Medicare related issues. 

State Specific Resources:  Many states have additional resources and programs you can take advantage of. 

In Massachusetts we have:

  • SHINE:  Serving the Health Information Needs of Everyone.  800-AGE-INFO (800-243-4636).
  • Mass Med Line:  Pharmacy Outreach, help with affording prescriptions, information about medications and side effects.  Free to MA residents.  866-633-1617.
  • Prescription Advantage Program:  State plan that supplements Part D.  800-243-4636

Upcoming Medicare Post Topics:

Medicare: When & How to Enroll
Medicare: Part B & D Premiums & Other Costs
Medicare:  What you need to know about Nursing Care coverage