The very short answer: Yes!
As you approach retirement, you may be wondering if Medicare is the right choice for you. A more helpful way to frame this would be “Which choices within Medicare are right for me?” Those with considerable wealth might even think that the complexities of Medicare could overshadow its advantages. In other words, it’s not worth the effort. But after understanding the various plan options, it almost always makes sense. After all, making sensible Medicare choices should be an integral part of your wealth management and retirement planning strategy.
Still not convinced? Consider this: throughout your career, you've been a contributor to Medicare via your taxes, with a current rate of 1.45% applicable to both employers and employees.1 You’ve already invested heavily in Medicare, and by enrolling, some of your return on investment will be in the form of better healthcare coverage.
The Medicare Pros
With well over 65 million individuals presently enrolled in Medicare,2 there must be compelling reasons to enroll. Here are are just a few.
We’ve Got You Covered
Medicare ensures that you have access to comprehensive healthcare services, including hospital care (Part A), medical services (Part B), and prescription drug coverage (Part D). This comprehensive coverage can help provide access to the care you'll need during retirement.3
Cost Savings
Medicare can offer cost savings compared to many private insurance plans. In fact, enrolling in Medicare means you may be able to reduce your out-of-pocket and overall expenses for your healthcare needs.
Staying Flexible
Medicare offers various plan options, allowing you to choose the coverage that best suits your needs. You would also have the option to switch plans during the annual Open Enrollment Period if your healthcare needs change.4
The Medicare Cons: Not So Bad
If you asked the few who decided not to enroll in Medicare, these are some of the reasons you’d expect to hear. The fact is, even the “cons” of Medicare could be seen as positives.
Too Complex
With numerous plan options and associated costs to consider, navigating the ins and outs of Medicare can be complicated. Yes, it is a bit of a Medicare maze. But it’s worth working your way through. The complexity of Medicare comes from the vast number of choices, and you can get help making those choices. Also, by the way, throwing your hands up in exasperation does not count as exercise!
And They Don’t Take … Medicare
It sounds like a twist on the old Visa ads, but for healthcare. Some healthcare providers may not accept Medicare. While this might limit your choices, it could also be an opportunity to explore new providers and broaden your healthcare network. Plus, most healthcare providers do accept Medicare, so the options are not as limited as some would have you think.
Sorry, You Make Too Much
All that hard work and your reward is higher premiums? Yes, that’s a possibility. High-income earners may be subject to the Additional Medicare Tax,5 for example. However, there are several factors that add up to your Medicare costs—and benefits. Sometimes you do get what you pay for.
For Your Consideration
Here are three more things to consider regarding Medicare:
Evaluate Your Needs
Assess your current and future healthcare needs to determine which Medicare plans align with your requirements. Factors such as your overall health, the likelihood of needing specialized care, and your preferences for healthcare providers will all come into play here.
Consider The Costs
Take time to compare the costs of Medicare with those of private insurance plans or concierge medicine services. It’s best not to think of Medicare as an either/or decision. Instead, make sure that you’re fully understanding how Medicare should best fit within your “healthcare portfolio.”
Long-term Care
In today’s world, retirement can last up to 30 years or more, and healthcare costs tend to increase over time. Medicare benefits can help cover these expenses, providing financial security and peace of mind in the long run. Medicare coverage is a long-term investment.
Ask Your Advisor
Your financial advisor can help you understand how Medicare fits into your overall retirement planning strategy. Medicare options—and ensuring that you enroll on time—will have a measurable impact on your finances. Your financial advisor can guide you based on your unique situation, helping you make informed decisions about your healthcare coverage with the financial perspective in mind.
The Takeaway
Medicare is not a one-size-fits-all program, but it really is as close to a no brainer as one can get when it comes to healthcare choices. But, because of the many options and complexities of Medicare, it’s essential to consider your options carefully—sooner than later—before making choices. Even for some wealthy individuals, Medicare still offers valuable benefits. By evaluating your healthcare needs, comparing costs, and consulting with your financial advisor, you can make informed decisions about Medicare plans that are also a healthy fit with your retirement plans.
Sources:
1 https://www.ehealthinsurance.com/medicare/cost/what-is-the-medicare-tax/
2 https://medicareadvocacy.org/medicare-enrollment-numbers/
3 https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare
4 https://www.medicare.gov/basics/get-started-with-medicare/get-more-coverage/joining-a-plan
5 https://www.hrblock.com/tax-center/healthcare/additional-medicare-tax/
Disclosure: This information is for educational and informative purposes and shall not be considered a specific recommendation. Readers are advised to speak with their advisor at JL Bainbridge to determine their specific recommendations that meet their investment objectives and to review their portfolios. The material being provided is thought to be accurate. However, the information is compiled from multiple resources and may become outdated or otherwise rendered incorrect by new research or corrections without notice. J.L. Bainbridge & Co., Inc., is not a broker dealer and does not offer tax or legal advice. Please consult your tax or legal advisor for assistance regarding your individual situation. It should neither be assumed that future results will be as profitable or that a loss could not be incurred. For more information related to our firm, please see our disclosure brochures at jlbainbridge.com and https://adviserinfo.sec.gov/firm/summary/108058.
