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Know your Medicare ABCs


Most Americans are eligible for Medicare when they turn 65 — in fact, if you already receive Social Security benefits, you are automatically enrolled. Medicare is multifaceted, though, and it can be difficult to determine which type of Medicare is right for you.

Medicare Part A is the hospital insurance portion of Medicare, which can help pay for home health care, hospice and inpatient-hospital care. It is premium-free for most retirees.

Medicare Part B helps cover medical costs (physicians, lab tests and physical therapy).

Medicare Advantage Part C is a private-sector alternative to parts A and B. You may choose to enroll in managed care or private fee-for-service plans, often resulting in fewer out-of-pocket costs.

Medicare Part D offers a prescription drug plan through a private company or Medicare-approved insurer.

Medigap: Medicare won’t cover everything, so many retirees purchase a Medigap policy. Medigap is handy for covering out-of-pocket expenses such as annual co-payments and deductibles. There are 10 standard policies available, which are sold state by state. Each policy offers certain core benefits. Plan A offers the most basic coverage, so educate yourself or call a professional for the plan that best meets your needs.

When you enroll in Medicare Part B, the open enrollment period for Medigap lasts six months. During this period the Medigap insurance companies cannot reject an application — even if the applicant is unhealthy.

Medicare coverage gaps: Medicare does not cover nursing home or assisted living, which is very expensive on a monthly basis. Long-term-care insurance can be affordable in your 50s or 60s, but don’t wait too long to obtain quotes or purchase coverage. You’ll need medical underwriting, which can become more difficult to get as you age.

Going private: Medicare isn’t a good option for everyone. Private insurance companies allow for pre-existing health conditions, for instance.

Medicaid is an option if neither Medicare nor private insurance works for your health and financial needs. The program has been greatly expanded by some states under Obamacare, but not in Idaho.

Mark Daly is a investment management analyst and a partner in The Perpetua Group.