Medicare
Why Make these Decisions Alone?
There’s more than one turn on the path to crafting the right Medicare plan for your retirement future. From medical cost changes to understanding the small-but-mighty differences between the four parts, making Medicare work for you requires more than just signing up.
MEDICARE & RETIREMENT HEALTH STRATEGY.
While there is no shortage of things to prepare for in retirement, it’s critical to also address your health needs and concerns by crafting a comprehensive health care strategy. There are various ways to accomplish this, with Medicare being the most important for many Americans.
Medicare generally provides health insurance for most people age 65 and older, and others who have received Social Security disability benefits for at least 24 months, have end-stage renal disease or have amyotrophic lateral sclerosis (also known as Lou Gehrig’s disease). Medicare is similar to Social Security, since it is a federal program that you have paid into throughout your career. Just like Social Security, you want to maximize this benefit in retirement.
Medicare is split into four parts:
- Part A: Hospital insurance – covers the costs of health care at medical facilities. Offers coverage for medically necessary inpatient care at hospitals, skilled nursing facilities, hospices and some home health services.
- Part B: Medical insurance – covers the costs of health care outside medical facilities. Offers coverage for doctors’ services, hospital outpatient care, mental health and some preventative health care services.
- Part C: Medicare Advantage (MA) plans – policies you can purchase from certain private insurance carriers that provide the same (or more) coverage as Parts A and B.
- Part D: Prescription drug coverage offered through private Medicare-approved insurance companies.
Many people with Part A do not pay a premium because they have already paid enough into the system. As with Social Security, a certain portion from each one of your paychecks is deducted to pay for Medicare. When you’ve had Medicare tax withheld from you or your spouse’s pay for at least 40 calendar quarters, then you may be eligible for free Part A coverage.
The monthly premium associated with Part B is set according to income level, although most people will pay a standard monthly premium amount and a small yearly deductible. Individuals and couples who have an annual income greater than their corresponding thresholds will have an extra charge added to their premium due to their high income level. Parts C and D are provided via private insurance companies so the monthly premiums of these policies depend on the extent of their coverage and can vary between companies.
Why Strategic Planning Matters
The “extra charge” for high earners is based on a two-year look-back at your tax returns. This means your 2026 premiums are determined by your 2024 income. Because IRMAA is a “cliff” surcharge, crossing a threshold by even one dollar triggers the full extra monthly fee.
Pathways Retirement Advisors has strategic partners for making sure you are not only getting the optimal Medicare plan and coverage yet also making sure your plan is structured to avoid the extra IRMAA charge.
Disclosure: We are not affiliated with, or endorsed by, the Social Security Administration or any other government agency. We do not offer every plan available in your area. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program (SHIP) to get information on all of your options.
Still have Questions?
How could my income affect my monthly Medicare premiums?
Do I need to sign up for Medicare Part A and B if I'm still working?
How can private insurance help me with the costs of Medicare?
How do I avoid the coverage gap with Medicare Part D prescription drug plans?
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