By: Hammond Iles on August 30th, 2016

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7 Things You Must Know About Medicare

Retirement Planning  |  medicare  |  Wealth Management

Open enrollment for Medicare is October 15 to December 7 every year.

Here are seven things you should know to protect yourself from coverage gaps, surprises, overpaying, and late fees:

Medicare-Hammond-Iles1. Medicare doesn’t cover everything! Most long-term care isn’t covered, and Medicare may require you to pay a deductible and/or a share of the costs for certain services.

2. If you enroll on time, you avoid expensive late-enrollment penalties. In general, you should sign up during the seven-month window that opens three months before the month you turn 65, and closes three months after you turn 65.

3. If you’re waiting until after 65 to take Social Security benefits, remember to enroll for the parts of Medicare you want so you avoid penalties.

4. Why pay more? You can manage your retirement income to limit what you pay for Part B premiums. For example, you could explore whether different types of tax-deferred investments make sense.

5. Remember to check to see if your plan's coverage extends beyond your local area so there are no surprises if you need health care while traveling.

6. While you must stop contributing to a health savings account once you enroll in Medicare, you can still use the money in the account to pay Medicare Part B and D premiums or other qualifying health care expenses. Also note that because premium-free Part A coverage can start six months back from when you apply for it, Medicare.gov suggests you stop contributing to an HSA at least six months before applying to Medicare to avoid tax penalties.

7. You don’t always have to keep a plan that doesn’t meet your needs.

If you’re unhappy with your coverage, you can shop around and switch coverage during annual open enrollment periods. You can switch from Original Medicare (Parts A and B) to a Medicare Advantage Plan offered by a private insurer or vice versa, or you can switch from one Medicare Advantage Plan to another.

You also can make changes to your prescription drug coverage. Note that in some cases, particularly when switching or adding Medicare Supplement Insurance (Medigap), there may be delays or limits in coverage of pre-existing conditions.

For more on Medicare, visit Medicare.gov.

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