Introduction
This guide is designed to help faculty members navigate the complex Medicare system as they approach retirement. Understanding your Medicare options is a critical component of retirement planning that can significantly impact your healthcare costs and coverage.
Timeline for Medicare Planning
3-6 Months Before Retirement
- Review your retirement date and health insurance transition plan
- Request the CMS-L564 form from Human Resources (for those who delayed Medicare enrollment while working)
- Begin researching Medicare options specific to your needs
90 Days Before Retirement
- Contact Medicare to initiate enrollment (if you haven't enrolled previously)
- Gather necessary documentation (Social Security number, birth certificate, employment records)
- Start comparing supplemental coverage options
After Retirement
- Confirm enrollment in selected Medicare plans
- Review coverage details and identify any gaps
- Mark calendar for future enrollment periods if you need to make changes
Medicare Basics: The Four Parts
Medicare Part A (Hospital Insurance)
- Coverage: Inpatient hospital care, skilled nursing facility care, hospice care, home health care
- Cost: $0 premium for most people who paid Medicare taxes while working
- Key Details:
- $1,632 deductible (2024) for each benefit period
- Covers up to 90 days in the hospital per benefit period, with 60 lifetime reserve days
- Does not cover long-term care
Medicare Part B (Medical Insurance)
- Coverage: Doctor services, outpatient care, preventive services, some home health services
- Cost: $174.70 monthly premium (2024 base rate) - may be higher based on income
- Key Details:
- Annual deductible of $240 (2024) before coverage begins
- After deductible, you typically pay 20% coinsurance for covered services
- "Welcome to Medicare" preventive visit in first 12 months
- Annual "Wellness" visits thereafter (not full physical exams)
Medicare Part D (Prescription Drug Coverage)
- Coverage: Prescription medications
- Cost: Varies by plan plus potential income-related surcharge
- Key Details:
- Each plan has its own formulary (covered drug list)
- Out-of-pocket spending limit of $8,000 (2024)
- Late enrollment penalty applies if you don't sign up when first eligible
- Do not enroll in Part D if you select a Medicare Advantage plan with drug coverage
Medicare Part C (Medicare Advantage a.k.a Managed Care)
- Coverage: Combines Parts A, B, and usually D, often with additional benefits
- Cost: Varies by plan (some have $0 premium)
- Key Details:
- Replaces Original Medicare (Parts A & B)
- Usually requires using network providers
- May include extra benefits like dental, vision, hearing
- Still pay your Part B premium
Supplemental Coverage Options
Option 1: Original Medicare + Medigap + Part D
- Original Medicare (Parts A & B): Provides your base hospital and medical coverage
- Medigap (Medicare Supplement Insurance): Helps cover costs Original Medicare doesn't cover
- Part D: Provides prescription drug coverage
Option 2: Medicare Advantage (Part C)
- All-in-one alternative to Original Medicare
- May include prescription drug coverage
- Often includes additional benefits not covered by Original Medicare
- May have network restrictions
Medigap Plans in Detail
- Standardized plans identified by letters (A-D, F, G, K-N)
- Same benefits for same letter plan regardless of insurance company
- Premium costs vary by company, age, and location
- Best time to buy is during your Medigap Open Enrollment Period (6 months from Part B enrollment)
- Plans C and F are no longer available to those new to Medicare after January 1, 2020
- Plans D and G are comparable alternatives to C and F
Working Past 65: Special Considerations
- You can delay Medicare enrollment without penalty if you have qualifying employer coverage
- Medicare will be secondary to employer coverage for companies with 20+ employees
- Request the CMS-L564 form from HR before retiring to avoid late enrollment penalties
- Domestic partners should enroll in Medicare when eligible (employer form may not apply)
- HSA contributions must stop once enrolled in Medicare (even just Part A)
Enrollment Periods
Initial Enrollment Period
- 7-month period including 3 months before, the month of, and 3 months after your 65th birthday
Special Enrollment Period
- 8-month period after employment or employer coverage ends
- Allows enrollment without penalty if you delayed Medicare due to qualifying employer coverage
General Enrollment Period
- January 1 - March 31 each year
- Coverage starts July 1
- Late enrollment penalties may apply
Medicare Open Enrollment
- October 15 - December 7 each year
- Can join, switch, or drop a Medicare Advantage or Part D plan
- Changes effective January 1
Medicare Advantage Open Enrollment
- January 1 - March 31 each year
- Can switch Medicare Advantage plans or return to Original Medicare
Cost Planning
Part B Premiums (2024)
| Individual Income | Joint Filing Income | Monthly Premium |
|---|---|---|
| $103,000 or less | $206,000 or less | $174.70 |
| $103,001-$129,000 | $206,001-$258,000 | $244.60 |
| $129,001-$161,000 | $258,001-$322,000 | $349.40 |
| $161,001-$193,000 | $322,001-$386,000 | $454.20 |
| $193,001-$500,000 | $386,001-$750,000 | $559.00 |
| Above $500,000 | Above $750,000 | $594.00 |
Part D Surcharges (2024)
Income-related monthly adjustment amounts may apply in addition to your plan premium.
Potential Out-of-Pocket Costs
- Deductibles: Part A ($1,632 per benefit period), Part B ($240 annually)
- Coinsurance: Typically 20% for Part B services
- Copayments: Vary by service and plan
- Premiums: Part B, Part D, Medigap or Medicare Advantage
What Medicare Doesn't Cover
- Long-term care (custodial care)
- Most dental care and dentures
- Eye exams for prescription glasses
- Hearing aids
- Routine foot care
- Acupuncture (with limited exceptions)
- Cosmetic surgery
- Healthcare outside the USA (with limited exceptions)
Resources for Faculty
University Resources
- HR Benefits Office: Assistance with retirement transition and CMS forms
- Via Benefits: Medicare plan selection support for Rice retirees
- Retirement counseling services
External Resources
- Medicare.gov - Official Medicare website
- Medicare & You handbook: medicare.gov/Pubs/pdf/10050-medicare-and-you.pdf
- Social Security Administration: 1-800-772-1213
- State Health Insurance Assistance Program (SHIP): Free, personalized counseling
Important Tips
- Compare costs and coverage annually during open enrollment
- Review plan formularies to ensure your medications are covered
- Verify your doctors accept Medicare or are in your plan's network
- Keep all Medicare communications and enrollment confirmations
- Be wary of "free" offers or unsolicited Medicare assistance
- Look beyond premiums to total potential costs (deductibles, copays, etc.)
- Consider your health needs, travel plans, and preferred providers
Frequently Asked Questions
Q: Do I need to sign up for Medicare if I'm still working with employer coverage?
A: Not necessarily. If your employer has 20+ employees, you can typically delay enrollment without penalty.
Q: What happens if I miss my initial enrollment period?
A: You may have to pay late enrollment penalties that last as long as you have Medicare.
Q: Can I change my Medicare coverage after enrolling?
A: Yes, during specified enrollment periods. The main opportunity is during the annual Open Enrollment (Oct 15-Dec 7).
Q: How do Medicare Advantage plans differ from Original Medicare?
A: Medicare Advantage plans replace Original Medicare, often include prescription coverage, may offer additional benefits, and typically have network restrictions.
Q: Will Medicare cover me if I travel internationally?
A: Original Medicare generally doesn't cover care outside the USA. Some Medigap and Medicare Advantage plans offer limited international coverage.
Q: How do I decide between Original Medicare with supplements vs. Medicare Advantage?
A: Consider your healthcare needs, preferred doctors, prescription drugs, travel plans, budget, and desire for additional benefits.
This guide is based on 2024 Medicare information. Medicare rules, coverage options, and costs are subject to change. Always verify current information through official Medicare resources.