Planning Ahead for Retirement

The older you grow, the more important it is to understand the benefits your present health insurance provides. The guidebook for your plan (available from your employer's human resources department) can help. If there are two income earners in your household, compare plans and coordinate benefits.

A whole new set of questions needs to be addressed as you draw close to retirement, such as:

• Can I transfer my present health insurance policy to a Medicare supplemental policy?
• How do I coordinate my Medicare supplemental policy with Medicare?
• What do I need in a Medicare supplemental policy?
• How do I plan for long-term care, if needed?

Medicare

Medicare is a federal health insurance program for people 65 and older. You are eligible for Medicare insurance coverage if you are 65 or older and eligible for Social Security or Railroad Retirement benefits. There are also some provisions for coverage under Medicare for those with disabilities.

Medicare has two parts: hospital insurance (Part A) and medical insurance (Part B). If you receive Social Security checks at age 65, you will automatically be covered by Medicare Part A. If you are not receiving Social Security checks, enroll for Medicare coverage at any Social Security office at least 3 months before you turn 65.

Medicare Part B, medical insurance, requires that you are eligible for Part A. Unlike Part A, Part B also requires that you pay a monthly premium (cost to you).

Supplements to Medicare

Medicare does not pay for all health care expenses. As a result, many seniors take out health insurance policies to cover the gaps in their Medicare coverage. Those policies are often called Medicare Supplemental Policies or Medigap Policies.

Insurance to supplement Medicare may be a good idea if you are: not eligible for Medical Assistance; do not belong to an HMO; an HMO does not fit your needs; or an HMO is not available.

It takes time and effort to pick a good supplemental Medicare policy. In Minnesota, laws set minimum standards for the policies to help seniors who are buying them. For more on Medicare Supplemental Insurance in Minnesota see Knowing Your Rights: A Guide to Minnesota Senior Citizen Legal Rights. You can order it from the Minnesota Legal Services Coalition at:

Check with the legal services office in your state for information on this topic.

Other types of insurance you may hear about as you move closer to retirement are:

• nursing home insurance
• long-term care insurance
• dread disease policies such as cancer insurance

Dread disease policies are not recommended because they only cover expenses for treatment of one specific illness, such as cancer. Without other coverage besides these dread disease policies, you are left vulnerable to large expenses from another illness or accident.

Planning Ahead for Retirement

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