Citi Personal Wealth Management
Your healthcare expenses are likely to climb sharply as you age. But fortunately, so does the help available to you.
Approaching age 65? It's time to learn about Medicare, the government-run health insurance program for older Americans. Medicare also covers certain people with disabilities who are under age 65.
As you try to wrap your head around the topic, it's helpful to focus on Medicare's five key building blocks.
Medicare Part A helps cover hospital bills, hospice, and some home health care. You automatically qualify for Part A if you've worked the 10 years required to receive Social Security or if you are on the account of someone who qualifies, such as a spouse. If you aren't yet receiving Social Security benefits, you should sign up for Part A during the three months before you turn 65, so you are fully enrolled by your birthday.
You can apply for Medicare Part A even if you have health insurance at work and are considering staying on the job past age 65. It doesn't cost anything and Part A may cover some of the costs not covered by your group health plan. You should ask your employer how signing up for Medicare will affect your company health insurance.
When you sign up for Part A, you will be asked if you also want Part B. In most cases, you'll want to say yes unless you are still working after age 65 and your company has a comprehensive medical plan, or your spouse is still working and you can stay on his or her plan.
Among other things, Medicare Part B covers most doctors' bills, X-rays, some lab tests, medical equipment and medications, and physical and speech therapy. Unlike Part A, Part B comes with a premium, which is based on your income and eligibility date.
In most cases, if you don't sign up for Part B within seven months after you become eligible, you may pay a late enrollment penalty. Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn't sign up for it. There are special exceptions to this such as when you and/or your spouse are still working and have health plan coverage through your employer or union.
If you want more coverage than you would receive from Medicare Parts A and B, you can instead choose Part C, also known as Medicare Advantage. Medicare pays a fixed fee for your care every month to companies offering Medicare Advantage plans.
These companies must follow rules set by Medicare. Each plan, however, can charge different out-of-pocket costs and has different rules for how you receive services, including whether you can see a doctor out of network. There's a wide variety of plans, so carefully compare several companies' costs and terms of coverage. Also, check with your doctor's office to make sure it accepts the plan you are considering.
Medicare Part D covers prescription drugs. It is offered to anyone with Medicare coverage and it is funded by the government, but you must join a plan run by an insurer or other private company approved by Medicare. Compare several plans in your area to see which ones pay for the drugs you need at a cost you can afford.
Even if you don't need extra prescription coverage when you turn 65, you may want to sign up for Part D anyway, in case your prescription drug needs change in the future. Additionally, there is a late enrollment penalty.
Most Medicare drug plans have a gap in coverage, also known as the “donut hole,” that comes into play after Medicare has paid a certain amount for your drugs each year.
Once you have enrolled in Medicare Parts A and B, you might consider Medicare supplement insurance, known as Medigap. Medigap is the system of private insurance that covers some of the holes–or gaps–in Medicare coverage. This insurance usually pays for premiums, co-payments, doctor's bills and deductibles that exceed charges approved by Medicare. It does not cover long-term care. Medicare also generally doesn't cover nursing home care, except for stays that are needed post-hospitalization.
For more information on Medicare and Medigap policies, including online tools to help you research costs and plan features, go to www.medicare.gov.
To get a quick initial projection on your medical costs during your retirement, try out our healthcare planning tool.
Citi). Not all products and services are provided by all affiliates or are available at all locations. CPB personnel are not research analysts, and the information in this Communication is not intended to constitute
research,as that term is defined by applicable regulations. to footnote reference 1
Review different scenarios for when taking Social Security may make sense for you.
Before a crisis hits, consider key steps to take to plan ahead and arrange for care.
If you need more income, consider seven ways to try to boost your income and maximize savings.
The above content is for informational purposes only and contains a summary of the topic and is not intended to be a comprehensive discussion, including any legal or tax ramifications of the strategies or concepts described herein. These strategies are not guaranteed to succeed or indicate future performance, and they do not necessarily represent the experience of other clients.
This is not an offer to buy or sell any of the securities, insurance products, investments, or other products named.
This material is derived from sources believed to be reliable, but accuracy and completeness are not guaranteed.
Please note that by visiting the URLs or hyperlinks referenced, you will enter another website created, operated and maintained by a different entity.
Citigroupand its affiliates do not provide tax or legal advice. To the extent that this material or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Any such taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor.
Citi Personal Wealth Management is a business of Citigroup
CGMI), member . Citigroup Life Agency (
) offers insurance products. In California, does business as Citigroup Life Insurance Agency, (license number 0G56746). Citibank, CGMI, and are affiliated companies under the common control of Citigroup
© Citigroup September, 2019Citi, Citi and Arc Design and other marks used herein are service marks of Citigroup Inc. or its affiliates, used and registered throughout the world.