TRANSCRIPT:
Medicare is a crucial part of retirement planning. It’s important to remember that Medicare is not a one-size-fits-all solution and it should be reviewed annually. Let’s discuss five common Medicare mistakes.
Hi, I’m Hunter Brockway, founder of Boca Retirement Strategies. My goal is to help you achieve a stress-free retirement while minimizing your tax burden. Medicare is the federal health insurance program for those 65 and older. As Benjamin Brandt aptly puts it, turning 65 means you’ll receive a flood of attention—emails, texts, and calls. If you mention Medicare three times, an insurance agent might even show up at your door. However, Medicare might not always be the best option for you; private insurance could be more suitable. Here are some common mistakes to avoid:
Mistake 1: Assuming Medicare is free or inexpensive. While Medicare can be a cost-saving option for many people, especially those who previously paid for private insurance, it does come with costs. Medicare includes Parts A, B, C, D, and Supplemental (Medigap) insurance, each with its own costs and deductibles. Be aware that Medicare IRMA brackets can increase your costs based on your income.
Mistake 2: Enrolling in Medicare late. Delayed enrollment can lead to penalties. Be mindful of the seven-month initial enrollment period around your 65th birthday. If you continue to work and have workplace insurance, you’ll have a special enrollment period when you lose that coverage. Penalties for late enrollment can add up—Part A can cost you up to 10% more for twice as long, Part B can add an extra 10% for every year you delay, and Part D can incur a 1% penalty per month you’re late.
Mistake 3: Not signing up for a prescription drug plan (Part D). Even if you don’t currently need prescription drugs, delaying enrollment in Part D can lead to lifelong penalties. If you need drugs later, you’ll have to wait for an open enrollment period and may face higher costs.
Mistake 4: Failing to review your coverage annually. Every September, review your Medicare insurance notices for changes in your policy, rates, coverage, deductibles, and provider lists. Websites can help you check for generic drug alternatives, which often have the same effectiveness as brand-name drugs. Consult your pharmacist for advice.
Mistake 5: Assuming pre-existing conditions don’t matter. While pre-existing conditions don’t affect your initial enrollment or a six-month grace period, they can impact you later. If you need additional insurance later, pre-existing conditions could affect your premiums or coverage. It’s better to secure supplemental insurance early to mitigate risks down the road.
Action Steps:
- Plan and understand your health insurance options before you need them.
- Avoid the mistakes mentioned above.
- Subscribe to our YouTube channel for more advice.
I’m Hunter Brockway, founder of Boca Retirement Strategies. If you have any financial questions, feel free to reach out to us at contact@BocaRetirement.com. Enjoy your successful retirement and thank you for watching!
