Getting ready to retire? Medicare coverage starting at age 65 is a valuable benefit, but some of the available options will change next year. Your financial advisor can help you choose a plan that matches your retirement needs.
If you’re among the more than 3.7 million Americans who will reach age 65 and become eligible for Medicare in the next year, choosing a specific healthcare coverage plan that aligns with your retirement goals and needs could be one of the most important financial planning decisions you’ll make. And you might be surprised at how many options exist in the market.
Navigating the enrollment process, comparing the benefits and weighing the costs of various Medicare and Medsup (Medicare Supplement) plans can be complex. As part of Mercer Advisors’ holistic approach to financial planning, we can help you understand all the available Medicare options in relation to your retirement and financial plans.
Nearly all Americans 65 and older are eligible to receive standard Medicare coverage, which includes:
Many participants choose to combine Parts A, B and supplemental coverage by enrolling in a Medicare Advantage (Part C) plan. The Part C plan generally includes prescription drug coverage (Part D). Many Medicare Advantage providers also offer extra benefits such as vision, dental and hearing that are not Medicare-covered benefits.
An alternative to Medicare Advantage is to enroll in the traditional Parts A and B and purchase a separate Medigap or Medsup plan. Prescription drug coverage (Part D) is purchased as a standalone policy under this option. Beneficiaries who elect this benefit structure may purchase separate vision, dental, and hearing coverage.
Medicare Supplement Plan F, which pays many of the out-of-pocket costs not covered under standard Medicare, as well as the Part B deductible, will no longer be available to people who become newly eligible for Medicare on or after January 1, 2020. Individuals who already have Plan F or are eligible to enroll before the end of 2019 can retain Plan F coverage.
Despite the phase-out, several other Medigap plans will continue to be available in 2020 and beyond. Although Plan F will no longer be sold, Plan G will still be offered. Plan G is identical to Plan F except that it does not cover the Part B deductible.
Your initial enrollment window for Medicare healthcare coverage begins three months prior to the month in which you turn 65, includes the month of your birth, and lasts through the following three months. Someone born on July 15, for example, can newly enroll between April 1 and October 31. Existing participants in Medicare Advantage and Part D plans can change their enrollment (e.g., signing up for a supplemental plan) between October 15 and December 7 for the 2020 year. Additional enrollment periods for special circumstances are also available throughout the year, so Medicare beneficiaries should understand their personal situation and options.
Because of this, if your 65th birthday occurs on or before December 31, 2019, you can still apply for the Plan F Medicare Supplement Plan, but you should still consider it in relation to all your other options.
Here are three key areas to think about when assessing Medicare Supplement Plan (Medsup) options in the context of your retirement and financial plan:
It’s also a good idea to meet with your insurance agent and financial advisor for help with making the right choice.
If you have questions about how Medicare healthcare coverage factors into your overall wealth management strategy and retirement planning, a conversation with your Mercer Advisors financial advisor could be a great next step. Along with helping you explore alternatives to Plan F coverage, your advisor can discuss potential adjustments to other pieces of your comprehensive financial plan.
You can learn more about Medicare enrollment and different coverage plans, including Plan F, on the U.S. Social Security Administration website. Also, check out our Insights page for additional retirement planning and investment management guidance, expert commentary, and financial market perspectives from your team at Mercer Advisors.
Mercer Advisors Inc. is the parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate, but is not guaranteed or warranted by Mercer Advisors. Content, research, tools, and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.
Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment, investment strategy or product made reference to directly or indirectly, will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance and results of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio. Historical performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark.
This document may contain forward-looking statements including statements regarding our intent, belief or current expectations with respect to market conditions. Readers are cautioned not to place undue reliance on these forward-looking statements. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Mercer Advisors’ control.
You are leaving the Mercer Global Advisors website and will be redirected to the Science of Economic Freedom (SOEF) website. SOEF is brought to you by Mercer Advisors Inc., the parent company of Mercer Global Advisors Inc., and is not involved with investment services. Mercer Global Advisors Inc. is an SEC-registered investment adviser headquartered in Denver, CO.
The Science of Economic Freedom website should not be construed by any consumer and/or prospective client as Mercer Advisors’ solicitation to effect, or attempt to effect, transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Furthermore, information on the SOEF website should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from Mercer Advisors.