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TURNING 65

How to Effectively Transition To Medicare

Soon You’ll qualify for Medicare. For some, it will mean remaining on employer coverage. For many, it will mean enrolling into Medicare as well as a Medicare Insurance Plan. Whatever your plans may be, patience and preparation are the keys for a smooth transition to the next phase of your life. This guide can help you get organized and better understand your choices, so you can make well-informed decisions that work best for your lifestyle.

Generally, if you have worked AND paid at least 10 years of Medicare taxes, then you will automatically get Part A premium-free when you turn 65. If you have applied for Social Security and/or have been disabled for 24 consecutive months, then you will be automatically enrolled into Part B as well. 

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1. The Bare Necessities

The first of your three main Medicare options; this is when you have Original Medicare (Part A & B) and a Prescription Drug Plan (Part D). Monthly costs will typically be your Part B premium $170.10 per month and the premium for a standalone Drug Plan $43 per month = national average. Since you will generally pay 20% coinsurance for most services, this option is likely to have the highest out-of-pocket costs. While there is no bad option, both of the following two options are set up to lower your copays & coinsurances and may also include extra services not covered by Original Medicare. 

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2. The Upgrade

We are simply taking “The Bare Necessities” and adding a Medicare Supplement (aka Medigap) plan. A Medigap is a private company that simply supplements your Original Medicare by picking up some or all of your deductibles, copays and coinsurances. “The Upgrade” comes with an additional premium ranging $40-$150 per month for a Medigap plan as a 65 year old. These plans are often age-rated, meaning: as you get older the monthly premium will also increase. For this reason, individual budget should be considered.

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3. The All-Inclusive Package

A Medicare Advantage plan (aka Part C) is a private company that manages your Medicare benefits and often lowers your shares of cost. Advantage plans have comparably low or even $0 monthly premiums, and many offer Part D coverage at no additional monthly premium. They also include a maximum out-of-pocket limit - effectively providing a safety net on your annual costs for emergencies - and often cover additional services that Original Medicare doesn’t, including: glasses and eye exams, hearing aids, over-the-counter medications, gym benefits, and more. These additional benefits vary by plan.