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Understanding Your Options for Healthcare Coverage in Retirement

Posted by Michael J. O'Connor | CWS®, Vice President Investments
September 17, 2013

The Basics of Medicare Parts A, B, C, D, and Medigap

As you enter retirement or approach the age of 65, there are a lot of questions about what happens next: When should I start taking Social Security? How should I diversify my portfolio to ensure my long-term investment goals are met?

Equally important is setting up your healthcare coverage. You’ll need to consider your healthcare needs, what coverage options are available to you, what the cost is going to be, what your budget allows, and so on.

In our four-part series on Medicare, we’ll examine details about your healthcare options in retirement, to give you a foundation for making informed decisions as you build your comprehensive financial plan.

Traditional Medicare, Medicare Advantage, and Medigap

Traditional Medicare (Parts A and B) is government-sponsored health insurance that just about every retiree age 65 and up is entitled to have. It provides you with hospital care (overnight stays, general nursing, etc…) and medical care (doctor’s visits, medical equipment, etc...).1

Medicare Advantage (Part C) is private insurance usually administered through a PPO or HMO. It is a coverage alternative to Parts A and B. By law, it provides all of the same coverage as Parts A and B, but it might also have some additional benefits such as dental, vision, and/or prescription drugs. If you purchase Medicare Advantage, it will replace your Part A and B coverage. There is a network associated with Medicare Advantage, so it’s important to know if your doctor is included. If you use a doctor outside the network, the copay could be higher.1

Medigap is a supplemental insurance to Traditional Medicare. It helps you pay out of pocket costs (deductibles, coinsurance), and may also cover you if you incur medical needs out of the country. There is no network associated with Medigap, and can be used anywhere Traditional Medicare is accepted.2

Medicare Part D is private insurance that provides for prescription drugs. If you purchase a Medicare Advantage Plan (Part C) that has prescription drug coverage, there is no need for Part D. If you purchase Medigap insurance, then Part D could make sense, since Medigap does not offer prescription drug coverage.1

How Should You Structure Your Healthcare Coverage in Retirement?

In future posts on Medicare, we’ll give more details on coverage and costs of each part, in an effort to give you information you need to help you make good choices about how you structure your healthcare.

Navigating the various parts of Medicare and private insurance offerings can be complicated, and it’s important that the plan you choose reflects your needs. It’s also important to consider how much the coverage is going to cost and how you’re going to pay for it over the course of retirement.

You don’t have to do this all on your own, however. To have one of our Wealth Managers create a comprehensive plan for you based on your financial situation and goals, please call us today at 1-800-541-7774.


1 CNN Money


Retirement Planning Medicare Healthcare in Retirement