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One of the biggest expenses to plan for in retirement is health care. Health insurance programs can save you money on your health care costs, bridge any gaps in coverage, and allow your savings to last longer. However, as an immigrant, you may not know if you quality for Medicare or the exchange for assistance with medical and prescription costs. It will depend on factors like if you are a citizen, your time in the United States, how long you’ve paid into Medicare, and your eligibility for other benefits like Social Security.
Determining what coverage you are eligible for is an essential part of retirement planning. It is important to prioritize saving for possible future medical expenses while you can in combination with health care coverage. If eligible, saving money throughout your life in a Health Savings Account (HSA) will allow you to withdraw the money tax free for qualified medical expenses. Overall, when selecting appropriate coverage, you should think about enrollment stipulations, costs, coverage, prescriptions, quality health care providers, and travel.
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What is Medicare?
One of the most well-known and debated health insurance programs is Medicare. It is a federal health care program generally for those of age 65 or older, but can also be used for younger individuals with disabilities and those with End-Stage Renal Disease or Lou Gehrig’s Disease (ALS).
There are four different types of Medicare. Original Medicare is administered through the federal government, while Medicare Advantage can be purchased through private companies.
Medicare Part A
Medicare Part A is your hospital insurance. It will cover medical events like inpatient hospital stays, stays in a skilled nursing facility, hospice care, and some home health care needs.
Medicare Part B
Medicare Part B is your medical insurance. It will cover doctors’ services, outpatient care, medical supplies, and preventative services.
Medicare Part D
Medicare Part D is your prescription drug coverage. Insurance companies and private companies approved by Medicare will offer these plans separately.
Medicare Advantage (also known as Medicare Part C)
Medicare Advantage, or Medicare Part C, gives you the opportunity to conveniently bundle Part A, Part B, and (sometimes) Part D.
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What doesn’t Medicare Cover?
This list may seem all-inclusive, but you’ll generally still have to pay your deductible, coinsurance, and copayment even if Medicare covers an item or service.
There are also many items and services that Medicare does not cover:
- Long-term care
- Dental care
- Eye exams for prescription glasses
- Cosmetic surgery
- Hearing aids and exams for fitting them
- Routine foot care
You will either need to purchase supplemental coverage for these circumstances or have enough in your budget and savings.
These options can help many people plan for health care costs in retirement, so it is essential to determine if you are eligible for the Medicare program.
United States Citizens
Generally, at age 65, you qualify for full Medicare benefits if you meet the following criteria:
- You are a United States citizen or a permanent legal resident
- You have lived in the United States for at least five years
- You or your spouse has paid into Medicare through payroll taxes for about ten years
However, some individuals may be naturalized United States citizens and meet the other requirements, yet live in another country during retirement. They are still eligible to enroll in Medicare at age 65, but they will want to think about whether they plan to return to the United States and the potential costs for delaying enrollment.
These individuals will have the option to enroll right at the age of 65 or to delay coverage. Medicare does not cover health care received outside of the United States, so it will be important to compare the monthly costs for signing up on time versus the premiums for enrolling late.
For those who plan to live abroad permanently, Medicare will not be a feasible option. They will want to explore other options for health care coverage in the country of their new residence.
Non-United States Citizens
If you are not a United States citizen, you will not qualify to buy into all sections of Medicare until you have been lawfully in the country for five years.
Keep in mind that undocumented immigrants will not be eligible at any time for Medicare, Medicaid or health care through the private exchanges.
As either a US citizen or a lawfully present immigrant, you can still qualify for premium-free Medicare Part A and to purchase Medicare Part B if you or your spouse are eligible to receive or currently receive:
- Social Security retirement benefits
- Railroad Retirement Benefits (RRB)
- Social Security Disability Insurance (SSDI)
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Find Out if You’re Eligible
The Official U.S. Government Site for Medicare offers an easy-to-use calculator to help you determine if you’re eligible for Medicare and what the premium amount will be. They recommend that you contact the Social Security office if your situation does not match the questions the calculator provides.
Don’t panic if you don’t qualify for Medicare or have access to health care through your employer! You can purchase guaranteed-issue private health insurance through the exchanges if you have not met the five year minimum. A simple web search could help you find temporary insurance until you are eligible for Medicare. Depending on your income level, you may even be able to obtain a subsidy.
Another option is to optimize your savings by maxing out your Health Savings Account (HSA) in your early years. The contributions will grow tax-deferred, and you can withdraw them tax free in retirement for eligible medical expenses.
Choosing Appropriate Coverage
Ultimately, you should consult with your doctors and other health care providers to determine what they believe will and won’t be covered for you under Medicare.
Verifying what your specific medical plan looks like will help to determine what combination of savings and coverage you need, thus increasing the accuracy of your retirement plan.
You will also want to consider the following factors when choosing which coverage is right for you.
Keep in mind that there are stipulations to which coverage types you can enroll in. If you enroll in Medicare Part A, you must also enroll in Medicare Part B. However, you can enroll in Part B without enrolling in Part A. Medicare Part D can be purchased if you’re enrolled in either Part A or Part B. A Medicare Advantage plan or supplemental coverage cannot be purchased unless you’re enrolled in both Medicare Part A and Medicare Part B.
Take a look at your budget and savings. You will want to review how much Medicare costs and what you can afford in your budget. You may save money by bundling coverage like in Medicare Advantage.
When purchasing certain Medicare plans, a non-citizen will have to pay premiums dependent on their income level and how they file their taxes.
Whether you are covered by Medicare or a health care plan through the exchange, you will want to ensure that you have sufficient coverage. In retirement, you could have expensive hospital stays, prescriptions, and other care. You will need reliable health care coverage, a substantial emergency fund, and possibly supplemental coverage to protect yourself in these situations.
If you are eligible, Medicare Part D will help you pay the costs of your prescription coverage. Alternatively, you will have to review the offerings in the exchange to weigh the options based on how many recurring and occasional prescriptions you take.
Quality Health Care Providers
Many people like options when choosing their doctors and hospitals. If you have preferences, you will want to check and see what your health plan allows for in-network and out-of-network treatment.
If you plan to travel during retirement, you will want to be medically covered without worry wherever you go. Make sure you research your coverage’s limitations.
Be sure to read the following pamphlets about Medicare from federal agencies: