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.

Most Popular

House Approves $3,000 Child Tax Credit for 2021
Coronavirus and Your Money

House Approves $3,000 Child Tax Credit for 2021

The proposal would temporarily increase the child tax credit to $3,000 or $3,600 per child for most families and have 50% of it paid in advance by the…
February 27, 2021
Third Stimulus Checks Are One Step Closer to Reality – How Much Will You Get?
Coronavirus and Your Money

Third Stimulus Checks Are One Step Closer to Reality – How Much Will You Get?

The House passed President Biden's $1.9 trillion stimulus package. While the bill faces hurdles in the Senate, the provisions authorizing another roun…
February 27, 2021
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021

Recommended

8 Insurance Products You May Not Need
Financial Planning

8 Insurance Products You May Not Need

You may be paying for insurance, such as long-term disability or product warranties, that is potentially unnecessary.
February 26, 2021
Roth IRA Basics: 11 Things You Must Know
Financial Planning

Roth IRA Basics: 11 Things You Must Know

A Roth IRA can be a great way to save for retirement since the accounts have no required minimum distributions and you withdraw the money tax-free.
February 25, 2021
33 States with No Estate Taxes or Inheritance Taxes
retirement

33 States with No Estate Taxes or Inheritance Taxes

Even with the federal exemption from death taxes raised, retirees should pay more attention to estate taxes and inheritance taxes levied by states.
February 24, 2021
Buying a Burial Plot Is a Grave Decision
Financial Planning

Buying a Burial Plot Is a Grave Decision

Thinking about buying a burial plot can be uncomfortable but making this purchase ahead of time has its advantages, including potentially saving you m…
February 17, 2021