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.

Health Insurance Before and After Retirement

April 1, 2025

Most employees depend on their employers for health insurance today. It is possible to go into the open market and buy an individual health insurance policy under the Affordable Care Act, but these policies tend to be expensive. Premium subsidies are available, but only if you meet asset and income limitations. Of the insurance options available to working people under age 65, their own employer plan—or a spouse’s plan if available—is likely to be the best choice.

If a client retires before age 65, they will have to find different insurance to take effect immediately after the employer insurance ends. If the client’s former employer offers retiree insurance to tide them over to Medicare age, great. Or, if the spouse is still working, the client may be able to get on the spouse’s plan. If neither of these options is available, the client may go onto COBRA, which will keep the employer insurance in force at full cost to the client. As a last resort the client will need to go into the open market and buy an individual policy to last until Medicare starts at 65. The cost of this pre-65 insurance will, of course, need to be figured into the post-retirement budget, and the client would need to be confident about covering the costs before making the decision to retire.

Once a client turns 65, the Medicare option becomes available. If a retiree has an ACA plan, they will leap at the chance to get into Medicare in order to lower their costs. If they have a retiree plan, they will be forced to have Medicare, either because the retiree plan ends at 65 or shifts to secondary payer status (serving as supplemental insurance) with Medicare as the primary payer. If they are on a spouse’s plan, and if the plan covers 20 or more employees, they may be able to stay on the spouse’s plan. But take note: Some plans specify that dependent spouses must enroll in Medicare upon turning 65. So if a client turns 65 while on a spouse’s plan they will need to check with the plan to see if Medicare enrollment is a requirement. (An over-20 plan can’t require an employee to enroll in Medicare, but it can require it of a dependent spouse.)

Related: Original Medicare vs. Medicare Advantage

Once Medicare becomes an option, by virtue of the client turning 65, health insurance should be reevaluated. Even if a client is still working and staying on an over-20 employer plan, or retired and staying on a spouse’s plan, the existing plan should be compared to Medicare, either traditional A and B with a drug plan and supplemental insurance, or a Medicare Advantage plan. Overall, employer insurance isn’t what it used to be: deductibles are up, cost-sharing is up, and certain specialist services may be hard to get. Clients should not assume that their employer insurance is better than Medicare paired with a good supplemental policy. It may be, but they don’t know that until they’ve compared benefits and potential out-of-pocket costs of both plans under their expected health care usage.

And that’s another thing that might change along with the passing of the client’s 65th birthday: they may need more health care services as they age. Employer plans are designed for younger, healthier populations. Deductibles can be high because employees don’t expect to get sick; in fact high deductibles are welcome if they keep premiums low. But high deductibles can be devastating for people who do get sick, or who contract conditions requiring expensive prescription drugs. Then you want a plan designed for more frequent and expensive health care usage. That’s Medicare, along with a supplemental policy and prescription drug plan or a Medicare Advantage plan.

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

Understanding New Jersey’s Senior Freeze Program

May 30, 2024

Navigating Property Tax Relief in the Garden State

Understanding the importance of financial planning for seniors, the State of New Jersey offers the “Senior Freeze” Program, a property tax relief initiative designed to stabilize property taxes for eligible residents. This program is specifically for those aged 65 and older, providing them with the opportunity to freeze the amount of property taxes they pay at a level established in a base year, protecting them from future tax increases due to rising property values or rates.

Eligibility Criteria: To qualify for the Senior Freeze Program, applicants must meet several criteria:

• Age – Must be 65 years or older on December 31, 2022, or receive Social Security disability payments on December 31, 2022, and also on December 31, 2023.

• Home Ownership – Must have owned and lived in or leased a site in a mobile home park for a manufactured or mobile home that they owned since December 31, 2019, or earlier.

• Taxes – Must have paid all 2022 property taxes by June 1, 2023, and all 2023 property taxes by June 1, 2024.

• Income Limit – Have an annual household income of $150,000 or less in 2022 and $163,050 or less in 2023. With some exceptions, all income must be taken into account, including things such as Social Security and pensions.

Click here to find out if you are eligible

Benefits: The primary benefit of the Senior Freeze Program is the ability to lock in the amount of property taxes paid at the level of a designated base year. This means that even if property tax rates increase, eligible seniors will continue to pay the amount they paid in their base year, effectively freezing their property tax burden. This can provide significant financial relief and stability for seniors living on fixed incomes.

The program also includes provisions for reimbursement of the difference between the amount of property taxes paid in the base year and the amount paid in the current year, subject to the program’s rules and limitations. Here are some Frequently Asked Questions.

Application Process: Interested seniors can apply for the Senior Freeze Program by completing an application form available here on the New Jersey Department of Treasury’s website. It is important to apply within the specified deadlines and provide all required documentation, including proof of age, residency, home ownership, and income. The deadline for submitting the 2023 application is October 31, 2024.

The Senior Freeze Program is a testament to New Jersey’s commitment to supporting its senior residents, ensuring they can enjoy their retirement years without the worry of increasing property taxes. For more detailed information and assistance with the application process, seniors are encouraged to visit the official New Jersey Department of Treasury website or contact their local tax office.

The New Retirement Rules

March 8, 2023

Highlights of the SECURE Act 2.0

Social Security Gets Biggest Boost Since 1981

October 14, 2022

The Cost of Living Adjustment, or COLA, from the Social Security Administration (SSA) is announced every fall and has major implications for the 66 million people who receive benefit checks. With inflation surging, retirees need help maintaining purchasing power. The agency announced its 2023 COLA will be 8.7%, the highest since 1981.

For those concerned about medical costs eating into this increase, Medicare – the health insurance plan for older Americans – said last month it would drop its premiums next year by about 3% for its Medicare Park B Plan.

For more information and context, please read this article from CBS News.

For instructions on how to sign up for a “my Social Security” account with the SSA, which is the fastest way to find out when and how much you will receive, watch the video below: