As you prepare for your retirement years, planning for medical care and expenses will become a considerable part of your strategy. Here are the basic facts you need to know about Medicare, so you can begin to make some of those important decisions.

There are two parts of Medicare. Medicare Part A covers hospitalization, and it’s free to everyone who has worked and paid Medicare taxes for ten years (or is married to someone who did). Part B covers doctor visits and certain other services, and is available for a premium.

You have to sign up at 65, unless you have credible employer or union coverage. You’re required to enroll in Medicare at age 65 (from three months before your birthday until three months afterward). If you miss that enrollment window you will be charged a permanent penalty on your monthly Part B premiums, in the amount of 10 percent for each 12-month period that you delay enrollment.

Note: This requirement does not apply to those with credible employer or union coverage.

You can enroll in Medicare before claiming your Social Security benefits. If you’ve claimed Social Security prior to turning 65, you will be automatically enrolled in Medicare. On the other hand, you might prefer to wait until your full retirement age (66 to 67, currently) before filing for Social Security. In that case you will need to remember to enroll in Medicare at 65.

You must choose between Original Medicare or Medicare Advantage. You can choose to enroll in Medicare Parts A and B (and optional Part D prescription coverage) or a Medicare Advantage plan, but not both. Medicare Advantage plans are administered by private health insurance companies, and must offer at least the same amount of coverage as Original Medicare. However, many plans offer additional benefits such as dental or eye exams.

Part B premiums are based on income. Most people pay the standard Part B premium, which is currently $144.60 per month. But some higher earners will pay a bit more. Currently, single tax filers who earn above $87,000 or married couples who earn above $174,000 are subject to this premium adjustment.

You can enroll in Medicare and also maintain private insurance coverage… If you’re still working at age 65 and covered by an employer’s plan, or you’re covered by a working spouse’s plan, you can enroll in Medicare. If the employer has 20 or more workers, Medicare will serve as secondary insurance. In many cases this can mean you owe very little to nothing for out-of-pocket medicare expenses.

But you can’t contribute to a health savings account anymore. Those covered by an employer’s health insurance plan plus Medicare cannot contribute to a health savings account (HSA) so that’s something to consider before enrolling.

There’s a lot to know about Medicare coverage, and these facts are just the basics. For more in-depth information related to your specific situation, give us a call and we’ll be happy to help you.