When you think about retiring, do you picture sleeping in? About no longer having to get up at 6 a.m. and braving icy roads to get to work on time? Are your thoughts filled with plans for more time with grandchildren, travel and maybe the occasional afternoon nap?
Changing your health insurance probably won't cross your mind until the letters and emails start coming with all kinds of coverage options around your 64th birthday. Turning a certain age doesn't mean you automatically have to retire – but if you're considering it, here are a few things to think about.
Can you continue on your employer-sponsored health insurance after retirement? Or will you be added to your working spouse's insurance plan? If no is your answer to those questions you will need to enroll in the federal government's Medicare program and find the best Medicare Supplemental option for you.
Medicare is a basic health insurance program from the federal government for people who are 65 or older. It's made up of these parts:
>> Part A covers hospital stays, care in a nursing facility, hospice care, and some home health care.
>> Part B covers certain doctors' services, outpatient care, medical supplies, and preventive services.
>> Part D adds prescription drug coverage.
Medicare does not cover all medical costs like long-term care, dental care, eye examinations for glasses, dentures, cosmetic surgery and hearing aids. And even if Medicare covers a service, you will likely pay a deductible, coinsurance and copays.
Many retirees enroll in Medicare Supplement insurance to cover the gaps.
Medicare Supplement plans are standardized, meaning that the "Plan G" Medicare Supplement offered by one company will pay the same benefits as the "Plan G" Medicare Supplement offered by another company. The only differences will be in the premium charged by each company and any "value added" programs and services the company might offer to their customers. Examples could include discount program for vision and hearing and gym memberships.
The premiums many companies charge for Medicare Supplement are based on the person's age, which means that the cost of your coverage increases as you get older.
In addition, most retirees have their supplemental insurance or Part B premiums deducted from their Social Security checks. Be aware as health care costs continue to rise, premiums will take a bigger bite out of those checks.
If you are just starting to think about retirement you are not alone. There are 10,000 other Americans doing the same thing. Working with a trusted advisor will help you compare plans, companies and prices. You can work with your insurance agent or broker or you can contact us. Our website offers resources, tools and information to help you you're your decision. We're always here to help.