Don’t Wait Until Retirement to Make Plans for the Medicare Years

When I’m 65

Barbara Kirksey knows firsthand the challenges of navigating the Medicare system.

She and her husband, Fred, weren’t aware of a technicality regarding signing up for a prescription-drug coverage plan, so he now pays a $13 penalty each month, for as long as he lives.

“The same thing happened to a family member,” said Kirksey, a Monticello great-grandmother and registered nurse. “I wanted to prevent other people from falling into that trap.”

For five years, Kirksey has been volunteering as a counselor for Serving Health Insurance Needs of Elderly, or SHINE, a program run by the state Department of Elder Affairs and the Florida Area Agency on Aging.

Kirksey is among 35 volunteers locally and 500 statewide who help residents navigate the complicated world of Medicare, which often spins in far-reaching directions.

Coping with Medicare is just one of the issues people face when they reach that big number: 65. But it’s a major one — and a common concern in Florida.

There are an estimated 4.8 million residents who are 60 and over in the state, with Florida ranking first in the nation for population percentage of elders (about 25 percent).

“Eighty-five-plus is the fastest growing group we have in Florida,” said Ashley Marshall, director of communications for the Florida Department of Elder Affairs.

There are nearly 4 million Floridians on Medicare, which provides health insurance for people over age 65 as well as disabled residents who qualify for the program.

“The most paralyzing component is thinking you have to face Medicare yourself, and that’s not the case here,” said Jeff Johnson, state director of Florida AARP. “It doesn’t hurt to have a second set of eyes take a look at what you’re thinking.”

While there are various classes offering Medicare help, SHINE is the major resource for helping people understand the process — and much more. These volunteers, who go through an intensive training and vetting process, are located in 11 areas around the state, offering phone and personal counseling. Their services are free, unbiased and confidential.

Counselors also help Medicare recipients apply for financial assistance programs and truly understand their benefits.

“A lot of people don’t know what benefits they have,” Kirksey said. She helped one woman who was overpaying for a pain patch costing her $300 a month. It turns out the elderly woman only had to pay $5 for generic or $15 for brand-name patches under retirement coverage she didn’t realize she had.

“There are so many scenarios for how people are covered for health insurance,” said Patty Shaffer, SHINE training consultant with the Department of Elder Affairs. “A lot of what we do is educate people to understand this crazy maze.”

One tricky issue: Not everyone retires at 65 anymore. For Social Security, the age of retirement with full benefits is age 66 if you were born before 1955, and 67 if you were born after that. But many decide to retire as early as 62.

For those who have already signed up for Social Security, a Medicare card will automatically come in the mail, and then the choices begin.

“People not immediately eligible for Social Security tend not to pay attention to Medicare,” AARP spokesman Dave Bruns said.

And that’s a mistake.

Experts advise those eligible for Medicare who are still working to apply for Medicare Part A, since it can supplement their health insurance. It’s also vital to learn about penalties and just what to expect from Medicare coverage, even for those who don’t need it yet.

People often expect Medicare to be their total safety net, and that’s not the case, experts say.

“A lot of people think Medicare is free,” said Janet Mills, a SHINE volunteer based in Treasure Island who has helped more than 10,670 people with Medicare counseling. She became a volunteer counselor after SHINE helped her with Medicare choices.

“Use the resources that are out there,” Marshall advises seniors. “The bottom line is there are a lot of decisions to make. Don’t avoid it. Don’t procrastinate. Get educated and empower yourself with the help of a program like SHINE.”

When you’re ready to go on Medicare, you’ll have plenty of options, but how you receive your benefits comes down to two main choices.

Option One

Original Medicare: It includes Part A, which is hospital insurance, and/or Part B, providing medical insurance. You will have a choice of doctors, hospitals and other providers as long as they accept Medicare. If a provider doesn’t accept Medicare, you may have to pay the whole bill at the time of service and may be charged up to 15 percent more than the Medicare-approved amount.

Barbara Kirksey (right) counsels people trying to navigate their way through the rules and other intricacies of Medicare through the state program SHINE.

Logan Stanford 

You don’t pay a monthly premium for Part A if you’ve worked full time for at least 10 years (40 quarters; they don’t have to be in succession). Don’t worry if you’ve worked part time most of your life. If you’ve worked at least 20 hours a week for 20 years, you’d still be eligible for Part A without those premiums. But all recipients pay a $1,260 hospital deductible each time they are admitted and discharged from the hospital. (This is known as a benefit period.) If you’re eligible for Medicare but still working, Part A can supplement your hospital costs.

With Part B, which covers outpatient medical care, most Medicare recipients currently pay $104.90 per month. This also covers equipment such as hospital beds, canes and diabetes supplies. There are also copays and a $147 annual deductible before Medicare kicks in.

You’ll likely want a supplemental insurance policy (Medigap) to help cover Medicare coinsurance and deductibles. There are lots of different plans with varying costs and coverage. Select a plan based on your health care needs and finances. For instance, some people might want coverage for cruises and foreign travel only available in some plans.

You’ll also want to consider Part D, which covers prescription drugs. You will pay copays and possibly a monthly premium and deductible.

Original Medicare doesn’t include coverage for hearing or hearing aids, eye examinations for glasses, acupuncture, cosmetic surgery or most dental care. However, a Medicare Advantage Plan (HMO, PPO, etc.) may offer some of these services as an enhanced benefit. Otherwise, you might want to get a private plan for these costs.

Option Two

Medicare Advantage Plan choices include Health Maintenance Organization (HMO), PPO (Preferred Provider Organization), Private Fee-for-Service (PFFS) and Special Needs Plan (SNP) coverage. It incorporates both Medicare A and B — hospital and medical insurance.

Advantage plans may include some dental, vision and hearing coverage.

You may pay a monthly premium in addition to the Part B premium and copays, but when enrolled in a Medicare Advantage Plan, insurance agents may not sell you an additional Medigap policy.

In most plans, you need to use doctors, hospitals and other providers that are in the plan’s network. PPOs are not as restrictive about going outside the network, but the copay will likely increase. 

The majority of plans include prescription drug coverage.

Important Deadlines to Keep in Mind

When turning 65, you have seven months to sign up for Medicare. This initial enrollment period is three months before your birthday, your birthday month, and three months after your birthday. Start the process early, experts recommend, so you have time to work out your finances and figure out all your options. You also don’t want to have a break in service of insurance coverage.

If you’ve already signed up for Social Security, you’ll automatically receive a Medicare card. If not, you’ll need to go to socialsecurity.gov to enroll. Your last chance to enroll without a penalty is three months after turning 65 if you or your spouse are without employer coverage. If you are covered by a drug plan from work, you must get a letter from your insurance plan each year that confirms you have “creditable” drug coverage (that measures up to Medicare’s standards), or you’ll face a lifetime penalty. As long as you are enrolled in Part D, you will pay that penalty.

There are special enrollment periods available to eligible individuals. For example, you have eight months after leaving your job or moving from one area to another to enroll in Medicare Part A or B.

If you do not enroll in your initial enrollment period or are not eligible for a special enrollment period, the next opportunity to enroll is during the general enrollment period, which is from Jan. 1 to March 31 each year. Coverage begins on July 1.

You can change your Medicare coverage whether you have a Medicare Advantage plan or a Prescription Drug Plan during the annual Open Enrollment Period from Oct. 15 to Dec. 7, with changes effective Jan. 1.

Then there’s long-term care to think about. Keep in mind that Medicare only covers medically necessary skilled nursing care and home health care under certain conditions. The average annual cost in 2014 for a semi-private room in a Florida nursing facility is close to $87,600 ($91,615 for a private).

You may want to consult a legal or financial advisor about protecting your assets and determining whether to invest in long-term care insurance.

 “Three out of four people want to receive long-term care,” AARP’s Bruns said. “The ideal situation is for a long-term policy to pay for skilled care for you in your home. A lot of people have that dream, but you have to make sure your policy gets you what you really want.”

But turning 65 isn’t just about financial and insurance concerns.

“Research is showing that one of the most fundamental predictors of life expectancy is remaining socially active and engaged,” said Hella Spellman, services and program supervisor at the Tallahassee Senior Center, which draws about 400 people a day for its activities, classes, entertainment and other programs.

“The more socially engaged you remain, the more active you can be, the more power you have over your own retirement and how you spend those retirement years,” said Rosetta Land, communications coordinator at the center, which also offers help in finding resources for counseling, caregiving, dental care, utility assistance and other needs.

Linda Roberts, the president of the board of the Tallahassee Senior Foundation, sums it up this way: “Really enjoying your life is what everyone’s real retirement goal is: to have fun and to live as comfortably and as healthy and as happy or content as you can possibly be while taking care of all these other things.”