Many people believe they don’t need Medicare planning. Upon reaching eligibility at age 65, all you need to do is sign up, right? Here are a few considerations as you approach your Medicare planning decisions:


Most people do not realize that some will pay more for Medicare Part B (doctor visits, tests, outpatient services) based upon your income. For example, couples earning more than $170,000 will pay an additional $54.10 per month per person. The highest surcharge adds $325 in additional premium per month.

Look Back

To determine your first year premium, Medicare reviews your past 2 years of income. Proper cash flow planning is important to avoid surcharges. Bonuses, stock option vesting, restricted stock, sale of a business may all add income causing Medicare premium increases.


You have between 3 months before and after your 65th birthday to sign up. Miss this deadline and you will pay a 10% surcharge for every 12 months missed. Miss 2 years and pay 20% more. These surcharges are permanent.

Not Running the Numbers

Some Medicare eligible people may elect to stay on a spouse’s insurance and suspend Medicare Part B to avoid the cost. It may be more cost effective to retain the spouse’s insurance but you must run the numbers to include premiums, deductibles and co-pays. You may also lose the ability to see doctors of your choice.

Choosing Proper Prescription Coverage – Part D

This coverage is privately sold to cover prescription medication. If you require specialized drugs, check to see which carriers provide what benefits. This should be part of an annual review since coverage of drugs and co-pays change regularly.

The Impact of Travel and Medicare Part C 

Medicare Advantage plans are private all-inclusive plans that include everything under traditional Medicare plus a drug plan and additional benefits like vision and dental. Since these plans are part of an HMO or PPO, you are usually limited to a specific geographic area. If living or traveling extensively overseas, this may not be a good option. When comparing costs to traditional Medicare, don’t forget to add premiums, co-pays, out-of-pocket costs and deductibles.

Pre-Existing Conditions and Medigap Plans

Alternately, private Medigap plans are not restricted to a geographic area or network and allow you to choose your own doctors. Another huge advantage: insurers cannot deny coverage or charge more for pre-existing conditions during initial enrollment (some may in the future).

While not a comprehensive list, these are a few critical considerations for all retirees once they attain Medicare eligibility. Running the numbers with an experienced financial planner can save hundreds if not thousands in avoidable premiums.

Author Chris Rhim, CFP® is a financial planner with over 27 years experience writing financial plans for individuals, executives, business owners, divorcees and retired individuals. He may be reached at 802-649-3400