6 Things
You need to Know About Medicare

As you head into retirement, we want to provide you with as much information as possible to help you understand your important federal retirement benefits.


This guide contains information gathered primarily from Medicare.gov, and is only intended to be a general overview of the Medicare program. To get specific information and advice pertaining to your unique situation, it’s important to meet with your personal financial advisor and visit Medicare.gov.


Keep in mind that the Medicare program is subject to change, and certain aspects of it vary by state.


Annual enrollment ends December 7th

1.) It's Not Free

Medicare will not cover all of your health care costs when you retire.

For most people, health care will be their largest retirement expense – even with Medicare. In fact, some estimates rank health care at the top of the list of retirement expenses, exceeding housing and recreation costs combined.

An average retired couple aged 65 in 2022 needs approximately $315,000 saved (after tax) to cover healthcare expenses, according to Fidelity Investments.1 Fidelity’s estimate does not include other health-related expenses, such as over-the-counter medications, most dental services, and long-term care. And the costs will depend on longevity, health factors, and retirement age, as well as whether tax-deferred or after-tax dollars are being spent on health care services.

A broader estimate from HealthView Services found that total projected lifetime health care premiums (including Medicare Parts B and D, supplemental insurance and dental insurance) for a healthy 65-year-old couple retiring in 2022 are projected to be $673,587 in today’s dollars.2

2.)There is no
out-of-pocket or annual limit

It’s important to know that there is no yearly or lifetime out-of-pocket maximum when it comes to Medicare. And for Part B, you usually pay at least 20% coinsurance for approved costs, no matter how high they are.

3.) the alphabet soup of Medicare Parts

Part A and B are provided by Medicare

Part C is provided by private insurers that contract with Medicare

Part D is also provided by private insurers that contract with Medicare

4.) What Medicare Doesn't Cover Is A Lot

Although Part C Medicare Advantage or Medigap supplemental plans may offer some coverages depending on their policy terms, neither Parts A nor B cover any of the following:

People are living longer than ever and women have a greater risk of needing long-term care because they often live longer than men. The cost of nursing care varies by
state, but it always expensive at an average $7,908 per month for a semi-private13 room as of 2021.


It’s estimated that roughly 56% of Americans turning 65 today will develop a disability serious enough to require long-term services and support, although most will need assistance for less than three years. About one in five adults, however, will have a disability for more than five years.14 Medicare doesn’t cover past 60 days if you become incapacitated and need nursing care, unless you qualify for Medicaid, which requires a spend-down of assets.

*Medicare won’t provide coverage for the 60 days in an LTC facility unless the patient was in a hospital for three consecutive days within a 30-day window.

5.) you usually pay for medicare by having it deducted from your social security check

Premiums for most Medicare plans may be deducted directly out of your Social Security benefit check, so keep that in mind when planning your monthly retirement income. If you are not already receiving Social Security benefits when you turn 65, you must sign up for Medicare through the Social Security Administration during a Medicare enrollment period.

If you are already receiving Social Security when you turn 65, Medicare Parts A and B are automatically deducted from your check, and coverage starts the first of the month that you turn 65 years old. Medicare Part B premiums must be deducted from Social Security benefits if the monthly benefit amount covers the deduction. You must proactively decline Part B if you have or choose different coverage.


You may elect deduction of Medicare Part C (Medicare Advantage) and/or Part D from your Social Security benefit, but it is your responsibility to ensure that the right premium deductions take place.

Enrollments in Medicare Part C and D (private plans) are not automatic, and you must choose your private insurer and proactively enroll. You have other options (besides Social Security check deduction) to pay the premiums for these private plans, which differ by provider. Most offer check, automatic debit, or credit card payments.

6.)You have up to 3 months after you turn 65 to sign up...

If you are already receiving Social Security benefits, you don’t need to do anything to enroll in Medicare. You will automatically be enrolled in Medicare Parts A and B effective the month you turn 65.

Otherwise, you must enroll in Medicare when you turn 65, unless you’re covered by an employer group plan that covers 20 or more employees (based on the current employment of your spouse). Most people sign up for Part A (usually free) within the initial enrollment period, but this may impact your ability to contribute to an HSA (Health Savings Account), so it is very important to check with your financial advisor.


If your employer group plan has less than 20 employees, you may also want to sign up for Part B during the seven-month initial enrollment period that begins three months before you turn 65. Medicare becomes the primary insurer by default if you are 65 with a group health insurance plan that covers 20 or fewer employees. In addition to possible penalties, if you don’t enroll in Medicare at age 65, your group insurance may refuse claims.


It is very important to check with knowledgeable, qualified resources when making decisions about your Medicare options to better understand how your Medicare plan choices may impact your finances.

Be prepared
with more than just Medicare

It’s clear that planning for health expenses and coverage when you retire could have a significant impact on your enjoyment of your Golden Years. Creating a retirement income plan can help you protect yourself and your family against the potential financial impacts of an unplanned illness, and give you the confidence that comes with taking action to help secure your future.

1- Fidelity Investments, “How to plan for rising health care costs,” 2022. fidelity.com
https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs (accessed 09/28/22)
2- HealthView Services, “2022 Retirement Healthcare Costs Data Report,” hvsfinancial.com
https://hvsfinancial.com/wp-content/uploads/2022/03/HVS-Data-Report-Brief-0312222.pdf (accessed 9/28/22)
3- Medicare, “Medicare & You,” medicare.gov
https://medicare.gov/pubs/pdf/10050-Medicare-and-You.pdf (accessed 9/28/22)
4- Medicare The Official U.S. Government Site for Medicare, “Medicare costs at a glance,” medicare.gov
https://medicare.gov/your-medicare-costs/medicare-costs-at-a-glance (accessed (9/28/22)
5- AARP, “Understanding Medicare Options,” AARP.com
https://www.aarp.com/health/medicare-insurance/info-01-2011/understanding_medicare_the_plans.html (accessed 2/25/20)
6- Medicare The Official U.S. Government Site for Medicare, “What’s Medicare Supplement Insurnace (Medigap)?” medicare.gov
https://www.medicare.gov/supplements-other-insurance/whats-medicare-supplement-insurance-medigap (accessed 9/28/22)
7- Medicare The Official U.S. Government Site for Medicare, “How to compare Medigap policies,” medicare.gov
https://medicare.gov/supplements/other-insurance/how-to-compare-medigap-policies (accessed 9/28/22)
8- Medicare The Official U.S. Government Site for Medicare, “Monthly premium for drug plans,” medicare.gov
https://medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/monthly-premium-for-drug-plans (accessed 9/28/22)
9- Medicare The Official U.S. Government Site for Medicare, “Part D late enrollment penalty,” medicare.gov
https://www.medicare.gov/drug-coverage/drug-coverage-part-d/costs-for-medicare-drug-coverage/part-d-late-enrollment-penalty (accessed 9/28/22)
10- Medicare The Official U.S. Government Site for Medicare, “Part D late enrollment penalty,” medicare.gov
https://www.medicare.gov/index.php/drug-coverage-part-d/costs-for-medicare-drug-coverage/yearly-deductible-for-drug-plans (accessed 9/28/22)
11- Medicare The Official U.S. Government Site for Medicare, “Costs in the coverage gap,” medicare.gov
https://medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/costs-in-the-coverage-gap (accessed 9/28/22)
12- Medicare The Official U.S. Government Site for Medicare, “Catastophic coverage,” medicare.gov
https://medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/catastrophic-coverage (accessed 9/28/22)
13- Genworth Financial, “Cost of Care Survey 2020.” genworth.com
https://www.genworth.com/aging-and-you/finances/cost-of-care.html (accessed 9/28/22)
14- U.S. Department of Health and Human Services, “Long-Term Services and Supports for Older Americans: Risks and Financing,” HHS Office of Assitant Secretary for Planning and Evaluation, Office of Disability, Aging and Long-Term Care Policy, 2022
https://aspe.hhs.gov/sites/default/files/documents/8f976f28f7d0dae32d98c7fff8f057f3/ltss-risks-financing-2022.pdf (accessed 9/28/22)
15- Medicare Resources.org, “How Did Medicare Benefits Change for 2022”
https://www.medicareresources.org/medicare-eligibility-and-enrollment/what-is-the-income-related-monthly-adjusted-amount-irmaa1/. (9/28/22)

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