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Plan Your Medicare Health Costs for Retirement - Blue Chip Financial

It’s smart to plan ahead for your retirement. Planning health-care costs, in particular, is important, since those costs may be among the biggest expenses you will have to face after retirement. This article from Medicare discusses the different plans available.

Plan Your Medicare Health Costs for Retirement

Medicare Advantage plans (Medicare Part C)

Medicare Part C, also known as Medicare Advantage plans, is insurance sold by private insurance companies that have contracted with Medicare. With Medicare Advantage plans, you receive your Medicare benefits through the insurance company instead of directly through Medicare. Medicare Advantage plans must offer the same benefits as Original Medicare (except hospice benefits, which are still covered under Part A). Many Medicare Advantage plans include prescription drug coverage and other benefits, such as dental and vision coverage, so they can give you all your coverage in a single plan. If you enroll in a Medicare Advantage plan with prescription drug coverage, also known as a Medicare Advantage Prescription Drug plan, you’ll have all of your Medicare coverage under a single plan.

Medicare Advantage plans set their own monthly premiums and other costs such as coinsurance, copayments, and deductibles. However, these costs must be approved by Medicare. These vary among plans, so when you’re figuring out your retirement costs, look at the costs and benefits of various plans to see what best fits your needs. Feel free to use the no-obligation Compare Plans tool on this page.

With Medicare Advantage or Medicare Part D Prescription Drug Plans, you still continue paying your monthly Medicare Part B premium.

Medicare Part D Prescription Drug Plans

Medicare Part D is prescription drug coverage sold by private companies approved by Medicare. If you’re enrolled in Original Medicare, Part A and Part B, you can get this coverage separately through a stand-alone Medicare Prescription Drug Plan. If you’re enrolled in a Medicare Advantage plan, you’ll typically get prescription coverage through a Medicare Advantage Prescription Drug plan. Although this coverage is optional, you may save money by getting this coverage as soon as you’re eligible for Medicare, during your Initial Enrollment Period (IEP). For most people, this starts when you turn 65 or have received disability benefits from the Social Security Administration or Railroad Retirement Board. If you don’t get it at that time, and you decide to enroll at a later date, you could face a late-enrollment penalty.

The cost of your Medicare Part D premium for a Medicare Part D Prescription Drug Plan or Medicare Advantage Prescription Drug plan depends on the specific plan you choose. Be aware that in addition to the monthly premium you pay for a Medicare Part D Prescription Drug Plan or Medicare Advantage Prescription Drug Plan, you may have to pay an income-related monthly adjustment if your income from two years ago, as reported on your IRS tax return, was above a certain limit.

Medicare Supplement plans (Medigap)

These policies, also known as Medigap plans, are privately sold, optional policies that are designed to help cover many out-of-pocket costs associated with your Original Medicare coverage. They don’t include drug benefits, but they help with some Original Medicare costs, like deductibles, copayments, and coinsurance.

In 47 of the 50 states, there are up to 10 standardized Medigap plans, designated with a letter (Medigap Plan A, B, C, D, F, G, K, L, M, N, plus a high-deductible Plan F). The other three states, which are Massachusetts, Minnesota, and Wisconsin, each offers its own set of Medigap plans. No matter where you live, though, if you enroll in Medigap, you must continue paying your Medicare Part B premium.

Medigap plans only supplement Original Medicare. They don’t work with Medicare Advantage plans, so you won’t need or be able to buy both types of plans.


Blue Chip offers various ways you can receive Medicare coverage. Click here to view our available Medicare Plans.


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