Navigating Medicare

May 30, 2025

By: Elaine Floyd, CFP®

Back in the day, when full retirement age for Social Security was 65 and most people retired and claimed benefits then, Medicare basically took care of itself. Enrollment was automatic along with the Social Security application, and many employers offered retiree health insurance to supplement Medicare. Those who didn’t have retiree insurance could buy a Medigap policy to cover prescription drugs (Part D did not yet exist), and some of the gaps left by Medicare, primarily the Part A deductible and the Part B 20% coinsurance. Medicare Advantage did not yet exist. Once a person was on Medicare with their retiree insurance or supplement, there was very little for them to think about. Medical bills were paid behind the scenes and the occasional bill they did receive was easily paid out of pocket.

Medicare is much more complicated today. If you are not receiving Social Security at age 65 (which, hopefully, you are not), you will not automatically be enrolled in Medicare. If you are working past age 65 and staying on your employer plan, you will have to figure out when and how to make the transition to Medicare, also taking your spouse’s insurance into consideration. With medical costs now so high and fewer employers offering retiree coverage, private insurance plays a much bigger role than it did before. This opens up many more choices and complications, all of which hinge on your individual health status and expected health care usage both now and in the future.

Financial advisors are often called to help with Medicare, even though it is clearly outside their financial wheelhouse. But because HR people who are helping employees with the rest of their retirement don’t really understand Medicare (and how it interacts with COBRA), and because you are being bombarded with marketing messages from private insurers who don’t have your best interests in mind, a little direction from your financial advisor can go a long way. It is not necessary for them to pry into your personal health situation, but by receiving a few tools and resources you should be able to navigate Medicare on your own.

Medicare enrollment periods

There are specific times a person can enroll in Medicare. In fact, the Medicare application asks a series of questions to determine if the person is currently in one of the enrollment periods. If not, they will not be allowed to proceed with the application.

The first is when they turn 65. This is called the initial enrollment period. A person can enroll in Medicare up to three months before their 65th birthday. Coverage will start the first of the month they turn 65. If they’re a little late it’s okay—they can apply up to three months after their 65th birthday. Coverage will start the first of the month after they enroll.

The second is called the special enrollment period and it’s for people who want to stay on an employer plan (based on active employment of self or spouse) after age 65. As long as they maintain continuous coverage under the employer plan, they can switch over to Medicare at any time. Most commonly the transition to Medicare is done when they leave employment. But they can do it anytime after age 65 (i.e., while still working) and up to eight months after termination. There is really no reason to utilize the 8-month grace period, though, because it could result in coverage gaps. COBRA pays secondary to Medicare for anyone age 65 or older, so even if a person takes COBRA (too expensive!), they will have to enroll in Medicare.

The third enrollment period is the general enrollment period, from January 1 to March 31 of each year, with coverage starting the month after enrollment. This is for anyone who missed one of the other Medicare enrollment periods. If there has been a gap in coverage, there may be a late-enrollment penalty: 10% of the Part B premium for every 12-month period they went without health insurance after age 65. This penalty will be assessed every year.

Part A and Part B enrollment is through SSA

The Social Security Administration handles Medicare enrollment. The easiest way to enroll is to do it online. Or people can call the main number: 800-772-1213. They’ll need to provide their Social Security number and place of birth as well as current health insurance information. It will not be necessary to prove insurance if they are enrolling during their initial enrollment period. But if they are enrolling after age 65, during their special enrollment period, in order to avoid penalties they’ll need to have their employer sign CMS Form L-564 attesting to their continuous health insurance coverage. If their initial enrollment period overlaps with their special enrollment period, the initial enrollment period takes precedence.

What Clients Need To Know About Opening and Managing Their Social Security Account

Go to Medicare.gov for private insurance options

Once a person is enrolled in Medicare Parts A and B, they can sign up for: 1) a Medigap policy and Part D drug plan, or 2) a Medicare Advantage Plan. Note that enrollment in these plans cannot take place until they are enrolled in Medicare, but shopping can start earlier. People who want to do it themselves can go to medicare.gov and “find health and drug plans” based on their zip code.

If they have opted for Original Medicare with a Medigap policy, they’ll be shopping for both a Part D drug plan and the Medigap policy. For the drug plan, they’ll want to enter their drugs and dosages in order to see what their out-of-pocket costs would be under each plan. If they don’t take any drugs, they can simply choose the lowest-premium plan. (But they can’t skip Part D; if they go more than 63 days without creditable drug coverage there will be a late enrollment penalty.) Drug plans operate a year at a time. If a person’s drug regimen changes or if the plan changes, they can shop for a new drug plan during the fall open enrollment period (Oct. 15–Dec. 7) and the new plan will start January 1. For Medigap, they’ll want to focus on Plan G, the most popular and comprehensive plan. The Medicare.gov website shows the options from the different carriers. “Issue age” is the better pricing method, otherwise premiums will escalate rapidly as they age. Because benefits are the same for all Plan G policies, they’ll be focusing primarily on monthly premiums. For drug plans they can enroll directly through the Medicare.gov website or, if they have further questions, can call the insurer and have them take the application. For Medigap policies they can call the plan or enroll through the company’s website.

People who opt for a Medicare Advantage plan can pull up all the plans in their area and review benefits and costs. Most Advantage plans have very low (or no) premiums, so it will be a matter of reviewing benefits and out-of-pocket costs for the various services. Medicare Advantage shopping can be a challenge because if there are things that are wrong with the plan—such as a narrow provider network or a propensity to delay or deny care—they won’t be apparent other than indirectly through a low star rating.

Open Medicare account

Once a person has enrolled in Medicare they can establish an account at medicare.gov and keep track of their claims, costs, and other information.

While transitioning to Medicare can be rather time-consuming, once it’s set up it should be easy to manage, especially if the person has Original Medicare and a Medigap policy and drug plan. Virtually all Medicare-approved expenses will be covered and paid behind the scenes. Drug plans will need to be reviewed annually, but the switch to a new plan is easy. (Be sure to note if the preferred pharmacy changes.) Medicare Advantage plans could be easy or difficult to manage depending on your health care experience and whether you face delays or denials in care. If you are dissatisfied, these plans can also be changed once a year.

Source: Horsesmouth, LLC
Horsesmouth, LLC is not affiliated with Lane Hipple or any of its affiliates.

Inflation Reduction Act: Biden Signs Sweeping Measures into Law

August 30, 2022

What it Means for Climate Change, Health Care, and Taxes

President Biden signed the Inflation Reduction Act into law on Tuesday, August 16, marking a major legislative victory for Democrats.

No Republican lawmakers voted for the bill, and it required a tie-breaking vote in the Senate by Vice President Harris in order to go to Biden’s desk. The legislation was a year in the making, and it contains measures aimed at combatting climate change, increasing tax revenue, and lowering health care costs for Americans. That sounds good, but what does it actually do for the record-high inflation numbers we have seen this year? Critics of the bill argue that it is counterintuitive in the long-run because of the billions in government spending it requires and the stifling of gross national profit through higher corporate tax.

Below, we have a high-level summary of some of the measures taken via the Inflation Reduction Act and how Americans may feel it impacts them now and in the future.

For a more detailed analysis of the bill, the Tax Foundation published this article sharing projections on how the bill will affect the U.S. budget window from 2022-2031.

A Year-Long Legislative Battle

Democrats struggled to make the legislation a reality after conservative Democratic Senator Joe Manchin of West Virginia pulled his support. At the time, Manchin cited concerns over approving more spending measures during a time of record inflation. However, Manchin and Senate Majority Leader Chuck Schumer, D-NY, resumed talks in July and struck a deal.

“The American people won, and the special interests lost,” Biden noted during the bill signing, with Manchin joining him on the dais.

What the Inflation Reduction Act Means for Health Care

When Biden mentioned special interests losing, he was referring to pharmaceutical companies. Many had lobbied against measures in the bill related to Medicare prescription drug costs. That’s because the new law enables the federal health secretary to negotiate the prices of some prescription drugs for Americans on Medicare, leading to lower prices for consumers.

The law also caps out-of-pocket prescription costs for Medicare Part D recipients at $2,000 annually. This cap goes into effect in 2025 and, combined with lower prescription drug costs, it is expected to lower health care spending for more than five million Americans.

Additionally, more than three million diabetic Americans on Medicare are now guaranteed that their monthly insulin costs will be capped at $35.

Finally, the Inflation Reduction Act also provides a three-year extension on the Affordable Care Act (ACA) health care subsidies that were created in 2021 as a pandemic relief measure.

Bold Steps on Climate Change

The Inflation Reduction Act set aside more than $300 billion to be invested in energy and climate reform measures. This gives it the distinction of being the largest federal clean energy investment in American history. In short, it’s the most significant step the U.S. has taken toward addressing climate change.

The law includes a $60 billion allocation to boost renewable energy infrastructure in the manufacturing sector, related to things like wind turbines and solar panels. It also created tax credits for electric vehicles, solar panel systems, and other measures to make homes more energy efficient. These tax credits take effect immediately, and the White House has plans to unveil an interactive website that allows individuals, families, and small businesses to easily access information about the tax credits.

The Biden administration and Democratic congressional leaders say the collective measures will reduce greenhouse gas emissions by 40%, based on 2005 levels, by 2030. However, this still falls short of Biden’s original goal.

Tax Measures

Energy efficiency tax credits aren’t the only tax measure in the new law. The Inflation Reduction Act also established a 15% minimum tax for all corporations earning $1 billion or more in income. This is expected to bring in more than $300 million in revenue.

Critics have noted that the legislation paves the way for 87,000 new IRS agents to be hired. This could disproportionately impact middle-class Americans and small businesses through increased audits.

Read Article: Strategies for Building Wealth In Your 50s

What’s NOT in the Legislation

Democrats initially hoped the new law would include funding for childcare, universal pre-K, and paid family leave. All of these items were dropped as negotiations with Manchin played out.

Additionally, and despite the law’s moniker, it does little to address inflation – at least in the present. The Congressional Budget Office reports that the Inflation Reduction Act will have a negligible impact on inflation in 2022 and into 2023. The Biden Administration says the combination of deficit reduction measures, higher taxes, and new green energy revenue streams will eventually lower inflation.

Additional summary information about the new law is available on the White House website.

If you have questions about the Inflation Reduction Act or wish to speak with a financial professional, contact Lane Hipple Wealth Management Group at our Moorestown, NJ office by calling 856-638-1855, emailing info@lanehipple.com, or to schedule a complimentary discovery call, use this link to find a convenient time.

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