By Laura Weber Rossman of Longevity Alliance, an independent national insurance broker who helps seniors compare and find the best Medicare supplemental insurance.
You’re a Baby Boomer so by definition you’re pretty good at dodging anything that smacks of getting older. But as age 65 creeps up, you’ll find your mailbox filling with information about Medicare. No dodging this decision.
In fact, selecting the right Medicare insurance plan can be a very important decision – both for your quality of health care and your retirement nest egg.
A report from the IRI found that a healthy 65-year-old male can expect a total cost of health care expenses, including premiums, for the rest of his lifetime to top $350,000, and a 65-year-old woman can expect at least $417,000 in health care expenses-a 13% increase compared to her male counterpart. It also found that the average person on Medicare will have out-of-pocket medical expenses totaling more than $4,300 per year.
So if you are getting ready to switch to Medicare, here are 4 mistakes you want to avoid.
1. Missing Your Initial Enrollment Period (IEP)
You must sign up for Medicare when you are 65. (go to http://www.socialsecurity.gov/ to sign up online). If you are working you’ll still need to sign up for Part A. The IEP is a 7 month period (3 months before, your birthday month, and three months after your 65th birthday). Miss it and you face penalties when you do finally sign up.
2. Staying on COBRA Too Long
Once you leave your employer and 65 or older, you only have 8 months to sign up for Medicare. Wait too long and you’ll have to wait for the General Enrollment Period (Jan. 1 – March 31) for coverage that will go into effect July 1. This is a complex area: get expert advice.
3. Thinking Medicare is Free
Your health care can cost as much as it did when you were employed. For most people, Medicare Part A (hospital coverage) is free. But most people pay $99.90 per month for Part B (doctor’s care). Medicare Part A and B together pay about 80% of your costs. You’ll pay the rest if you don’t have additional coverage. You will pay a monthly premium for a Medicare Supplement plan or a Medicare Advantage plan. If you want a Medicare Part D drug plan that averages about $30 per month (unless it is wrapped into your Medicare Advantage plan).
4. Failing to Shop and Compare Medicare Plans
Plans and benefits can vary widely among insurance companies offering Medicare Advantage and Medicare Drug plans. Medicare supplement plans are standardized (all companies must offer the same benefits) but the prices can vary by hundreds of dollars between companies. So to find the right plan at the right price you should shop and compare plans. Always use someone who has knowledge about Medicare and Medicare insurance plans.