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Medicare Planning


Medicare is only one part of your retirement healthcare plan.  It is more complex than the individual or family healthcare plan you had during your working years.

Medicare is only an individual plan.  For hospital coverage and outpatient coverage, it is the old 80/20 plan most of us had when we first started working.

Medicare has at least 3 components: Hospitalization coverage (Part A), Outpatient coverage (Part B), and Drug coverage (Part D).  Unlike your medial insurance when you were working, they are all not covered by the same insurance plan.  In addition, you might also have a "Supplemental" plan to cover most of the deductibles and co-pays (usually Plan G now, thanks to the Affordable Care Act).

Hospitalization coverage (Part A) - Managed by Federal Government

Outpatient coverage (Part B) - Managed by Federal Government

Drug Coverage (Part D) - Managed by Private Insurance

Supplemental Plans (cover deductibles and co-pays) - Managed by Private Insurance

Medicare Advantage Plans (Part C) - Managed by Private Insurance (usually now with deductibles and co-pays)

Four things to note about Medicare

1)  Medicare enrollment dates are no longer in sync with Social Security benefit filing dates (both used to be age 65), and Medicare enrollment for Part A is still age 65.  Part B may be delayed if you are still working and covered by credible health insurance.

2)  Many private practice doctors will not service Medicare patients because of the forced lower payment schedule.  Usually if you have had a doctor for years, that is not an issue.  But if your doctor retires, or if you move to a new area, finding a doctor that will take you on as a new patient may be difficult.

3)   The "Medicare Trust" is projected to run out of money in 2024

4)  Medicare provides very limited Long Term Care benefits,  and only following a hospital stay for rehabilitation - and only while showing improvement.

When It Was Created

Plan A  Hospitalization - 80 / 20 Plan

Plan B Outpatient (Doctor) 80 / 20 Plan

Age Eligible - 65

Life Expectancy - 60

Cash Flow - Positive.  More funds coming in that benefits being paid out

Current Benefits

Plan A  Hospitalization - 80 / 20 Plan

Plan B Outpatient (Doctor) 80 / 20 Plan

Plan D Drug coverage

Medicare Supplements and Medicare Advantage Plans

Age Eligible - 65

Life Expectancy - 84

Cash Flow -  Negative.  Medicare Trust Fund projected to run out of funds 2024

Economic / Legislation

Affordable Care Act -  There were major long term impacts to Medicare because of the Affordable Care Act.  The main one that impacted our clients was the elimination of Plan F as an option (the best one at that time) as it was considered a "Cadillac Plan" because it had no deductibles and no co-pays.  If you had it you could keep it, but it created a "Death Spiral Risk Pool" and the premiums would eventually skyrocket so high, that retirees that had the plan would be in financial difficulty in later years.

If you retired after the Affordable Care Act, Supplement Plan F was no longer an option.

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