Creative Retirement Planning

Medicare is generally available only to retirees and spouses 65 and older who receive medical benefits through FCPS (see exceptions below). You can sign up for Kaiser Permanente Medicare, provided you live in its service areas. The FCPs pension plan requires you to sign up for Medicare Part A and Part B if your retiree spouse or family member is eligible.

Most people will compare Medicare Supplement plans 2020 and rely heavily on government-sponsored plans such as Medicare for retirement health care. You pay for your medical care through your pension insurance, as well as your health insurance premiums and deductibles.

If you are eligible at age 65, you deduct a portion of the cost from your paycheck, and checks your eligibility and calculates an estimated premium.

A potential retirement shortfall is if you plan to retire before age 65 but continue with your employee insurance. If you currently have a generous employer-sponsored plan, you may not need to maintain that coverage in retirement and should consider downgrading it to reduce costs. However, effective July 1, Medicare will become your primary plan and you will retire on or before June 30.

If your Medigap plan or Medicare Advantage plan cannot cover you, FCPS can transfer you and your dependents to an Aetna Medicare Advantage plan. For example, if you are enrolled in Aetna Innovation Health and are eligible for Medicare, you can switch to Aetna Medicare Advantage programs at retirement age. Blue Choice Advantage Plan covers you up to two years after your retirement age or up to age 65.

Your Medicare Advantage plan would be your primary insurance policy instead of original Medicare, but it is necessary to provide you and your dependents in the United States with the best health care available. Original Medicare lets you pay the entire cost of treatment and maintenance until you leave out of pocket. Although most dental, vision, and hearing plans cover routine services at the time the policy takes effect, they tend to have higher deductibles, waiting times, higher co-payments, or higher premiums than your original plan.

Dental, visual and hearing care are also combined with prescription drugs, many of which are included in your plan. The disadvantage is that you typically have to follow the doctors and hospitals included in the plan and require a referral or prior approval before you can see a specialist or use certain services.

Medicare Advantage premiums are generally significantly lower than Medicare surcharges, and many enrollments are on zero-premium plans. This means that retirees can plan their health insurance costs for retirement with a Medicare supplemental plan before age 65. When employer-subsidized employer group health insurance ends or Medicare begins, these plans can be planned in advance. The upside is that Silver plans are much cheaper for seniors than their Medicare Advantage counterparts.

This, in turn, leads to additional premium management options through the use of Premium Assistance Tax Credits available to married couples with children under 65 and those who currently pay high monthly premiums for Medicare Part B and D.

For example, a 50-year-old man who doesn’t save for his health care would have to set aside $7,129 a year to cover his Medicare Part B and D premiums. Assuming a 6% return, he could contribute an additional $183 to his 401 (k) to match his premiums and cover future premiums for the rest of his life. If he invested his savings at an annual return of 5% (assuming a 2.5% return on his retirement savings), he would be able to increase his retirement wealth by more than $110,000 by extending his expected life expectancy by more than a year.

Choosing financial products that help reduce Medicare premiums in retirement, and using strategies that include these accounts, can create opportunities to maximize your retirement income. HSAs offer a triple tax advantage: Contributions are taxable, withdrawals are used to pay for health-related expenses, including Medicare premiums, and profits are not taxed. Contributions to a 401 (k) account or other retirement savings account are included in the calculations that determine Medicare’s higher income surcharge, but withdrawals do not count toward your income tax rate or use taxes - free of charge if you need to use or use the withdrawals to pay health-related costs such as health insurance premiums and deductibles.

Most retirees do not pay their Medicare premiums, deductibles, or other health care costs until after retirement age, and some already pay while they are working.

If you choose Medicare Part D, you pay your monthly premiums directly into the plan you are enrolled in. Part B or Medicare Part D is the most common form of health insurance for retirees in the United States. FCPS health plans include a prescription drug benefit, but you don’t have to sign up for a Medicare-D plan.

In closing, Nadia de la Houssaye, a partner with the Jones Walker law firm, says, according to,  “Though states will likely resist such federal legislation, state licensing boards will nevertheless maintain control over issuing provider licenses located in the state, while allowing providers to treat patients remotely in other states,” she says. “Additionally, Congress could re-visit the TELE-MED Act of 2015, which would permit Medicare providers who are licensed in one state to provide telehealth services to Medicare patients across state lines and without the need for additional state licenses. Though removal of state licensure barriers will not happen overnight, it is essential to the future of telehealth.