investing

Health Coverage Is No Slam Dunk

I hadn’t reckoned on some curveballs along the way — especially when it came to signing up for Medicare Part B and Medigap.

When I was editor of this magazine, I read every story—usually more than once. So when I was planning my retirement as editor earlier this year, I thought I had everything under control. Imagine my dismay when I learned that, well prepared though I was, I hadn’t reckoned on some curveballs along the way—especially with regard to Medicare and health insurance—or how labor-intensive it would be to iron out all the devilish details. So I’d like to share a few nuggets of wisdom to smooth the way for future retirees.

Nugget No. 1:

Check your employer’s rules. I knew that I was covered by my employer’s health insurance until the end of July, the month in which I retired. So I figured I also had until the end of July to use money in my flexible spending account. I found out just in time that I had to spend the money by my actual retirement date, July 7. So on July 6, I made a beeline for my optometrist to buy a pair of prescription sunglasses and empty my account.

Nugget No. 2:

Start early. For me, signing up for Medicare Part B turned out to be unexpectedly time-consuming. I knew I had eight months after leaving my job to sign up for Part B, which covers doctor visits and other non-hospital expenses, without paying a penalty. But I wanted coverage to begin about a month after I retired. (I had signed up for Part A, which covers hospital costs, several years earlier when I turned 65, but because I was still working then and covered by my employer’s health insurance, I was able to delay Part B.) What I didn’t realize, and found out almost by chance, was that I should sign up six weeks to two months in advance of the month in which I wanted coverage to begin—in my case, August 1—to get the paperwork through the system.

I was already at the six-week mark, so I hotfooted it down to my local Social Security office to submit my application. I was handed a receipt dated June 21 and assured that my coverage would take effect on August 1. In the meantime, I was told, I’d receive a letter of enrollment in the mail so I could begin looking for a supplemental plan to fill the gaps in Medicare (see Your Medicare FAQs). When I got home, I opened an account at MyMedicare.gov. And then I waited. And waited. No letter of eligibility. No enrollment notice in my online account.

On Friday, July 28, I made another visit to the Social Security office. I was assured that I was “in the system.” But without proof of some kind, I couldn’t sign up for a supplemental plan. And I worried that after July 31, I’d have no proof of coverage if I needed care.

Finally, on August 2, a confirmation notice appeared in my online account. The physical letter, dated August 7, arrived the following week. My husband’s application didn’t take as long, and perhaps I needn’t have worried. But to avoid feeling adrift in the bureaucratic void, start the process at least two months in advance.

Nugget No. 3:

It’s complicated. While I was waiting for my Part B confirmation, I began researching coverage to supplement Medicare and pay for prescription drugs. The links at Medicare.gov and other sites were helpful but not conclusive. I spent hours poring over plan details to decide whether to sign up for a Medigap plan (and which one) or go with Medicare Advantage.

My colleague Manny Schiffres, who recently retired as Kiplinger’s executive editor, summed up the experience neatly: “I can’t believe how complicated this stuff is.” (We later found out that a friend of ours had hired an insurance consultant to handle his Medicare sign-up.)

Your experience may be easier—but you can’t count on it. Be prepared, and give yourself plenty of time.

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