Most of us have enjoyed the benefits of being covered by a generous group health care plan during our working years. When I talk to Baby Boomers who are getting ready to retire or who are already retired one of the common laments I hear is how shocked they were/are when they realized how much they had to pay for health insurance once they cut the cord from their employer plan. Many thought that Medicare would cover all or almost all of their medical costs. They were surprised to learn of the many out-of-pocket costs that come with Medicare. Here are 5 ways you can keep those costs down when you face your own healthcare planning decisions in retirement.

1. Avoid the Medicare late enrollment fees. Most people don’t realize there are penalties if you don’t enroll on time. If you fail to enroll on time you will be charged 10% of the Part B premium for every 12 months you delayed signing up. Guess what? That penalty is permanent. You pay it for the rest of your life! Get to know your enrollment deadlines.
2. “You gotta shop around”. Yes, heed the advice from that old song by The Miracles. I know it’s another shocker; Medicare doesn’t cover everything like prescription drugs and copays. A study by Plan Prescriber found that 90% of Medicare beneficiaries are paying too much for their drug plans. There is a wide gap in premiums charged for Medigap and Medicare Advantage plans as well so shop carefully.
3. Become a consumer healthcare wonk. When we were covered by our employer plan we didn’t feel the need to shop around for healthcare costs because we were limited by our PPO or HMO. With the increased focus on healthcare in America we have become more aware of healthcare costs. Once you are on Medicare you have to be aware of which doctors accept Medicare and Medicare assignment which means you will be billed for no more than the Medicare approved amount.
4. Reduce your MAGI to avoid the income-related adjustments. That’s right; if your income is over $85,000 (single) or $170,000 (married) you will be charged extra for Part B and Part D of your Medicare coverage. Talk to your accountant and/or financial advisor to see if you can reduce your modified adjusted gross income.
5. Stay healthy. It won’t reduce the premiums but it will help you avoid copayments and coinsurance costs every time you visit the doctor. Eat right, exercise and just plain take care of yourself the best you can. There are a number of free screenings you can take advantage of with Medicare such as prostate screenings and mammograms and don’t forget that free flu shot. The more proactive you are the sooner you can catch any illness that may crop up and that could not only save your life but also reduce your trips to the doctor which gets expensive – even with Medicare.

If there ever is a time in your life where you have to participate in your healthcare it’s when you sign up for Medicare. There’s a lot to know and a lot to be aware of like penalties for signing up late, knowing what Medicare covers and what it won’t and the variance in premiums for Part D drug coverage and other private insurance. Take the time to be informed. Want to know more? Click here to get a FREE copy of your Guide to Medicare.

Question: What concerns you the most about healthcare? You can leave a comment here.