Dave Ramsey Totally Nails This Medicare Advice

Dave Ramsey is an undeniably popular personal finance expert. Although he is best known for his approach to getting out of debt and getting ahead financially, Ramsey offers spot-on advice for many other money topics, including Medicare coverage.

His recommendations can be valuable if you are approaching Medicare age or simply want to prepare for future healthcare costs.

Here, explore everything he gets right about Medicare.

You might know that you qualify for Medicare enrollment at age 65. But it’s critical to understand the timeline surrounding Medicare enrollment. Otherwise, you could get stuck paying a late penalty.

“Seriously, understanding and getting enrollment right is super important because if you get it wrong, you could end up paying penalties the rest of your life. Yeah, the stakes are that high!,” said a recent post by Ramsey Solutions.

Generally, you can enroll between three months before and three months after your 65th birthday. If you missed this initial enrollment period, you can sign up during a Special Enrollment Period without paying a penalty. But if you miss both windows, you’ll likely pay higher premiums for the rest of your life.

When you start exploring your Medicare options, you’ll quickly realize there are many different plans and combinations. For most people, Ramsey advises selecting a more comprehensive Medicare plan. If you opt for a bare-bones plan, you’ll likely find coverage gaps and more out-of-pocket expenses.

Medicare Advantage tends to be a more comprehensive option, but you should still exercise caution when choosing a plan.

“Medicare Advantage is sometimes the right fit for some people,” said a post by Ramsey Solutions. “But watch out for insurance agents and Medicare advisors who push Medicare Advantage no matter what. They make more money from selling you Medicare Advantage — and it’s easier because it comes in one package, so they don’t have to chase down a supplement policy that fits your needs.”

Although Medicare provides baseline health insurance coverage, Ramsey suggests that Medicare alone may not be enough coverage. Many people will need to purchase a supplemental plan, called a Medigap plan, to help fill in the gaps.

Even Medigap policies might not be enough.

“Because Medicare doesn’t cover everything, some people need to get supplemental health insurance (beyond Medigap),” according to Ramsey.

After you get your coverage locked in during your initial enrollment period, getting familiar with the subsequent enrollment periods is essential. Specifically, these additional enrollment periods allow you to change or switch plans altogether.

Throughout the year, keep tabs on whether or not your plan is working for you. If not, plan to make a change during either the Open Enrollment Period, Medicare Advantage Open Enrollment Period, or Medigap Open Enrollment Period.

While assuming that everything is covered through Medicare is tempting, that’s not true.

“Let’s just say if Medicare were an outfit, it’d be a bikini. A lot of what Medicare doesn’t cover is also what regular health insurance doesn’t cover. But there’s extra stuff too,” wrote Ramsey Solutions in a recent post.

Get familiar with what is not covered, such as vision, annual physicals, chiropractic care, and podiatry. Ramsey suggests you don’t cut corners when obtaining the appropriate healthcare coverage for your unique situation.

Medicare can help you with medical costs. However, if you need the specialized care of a nursing home stay, assisted living facility, or in-home caretaker, Medicare usually won’t pick up the entire tab for a comfortable situation.

“Once you get a solid long-term care insurance policy in place, you’ll have a lot more peace of mind when you think about growing old,” wrote Ramsey Solutions in a recent post.

Ramsey suggests buying long-term care insurance at age 60 to lock in a reasonable premium for this necessary coverage.

The right approach to Medicare can help you avoid wasting money on medical costs in retirement. Although many retirees bank on this type of coverage, it’s critical to understand what’s not covered. You’ll likely need to fill in the gaps to prevent a financial disaster due to medical care costs in retirement.