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Staying healthy for retirement
Mastering the Medicare machine: It's a masterpiece of confusion, but it just might save you a bundle
October 10, 2005: 3:49 PM EDT
By Michelle Andrews and Ellen McGirt
The dream retirement

AND...
MONEY's best places to retire

NEW YORK (MONEY Magazine) - If you are age 65 or older, brace yourself for a lot of mail. From your former employers. And insurers. From Uncle Sam. And still more insurers.

They will be showering you with information about changes in your existing insurance. They'll be flooding you with marketing materials about new coverage options.

And as if the postal deluge weren't enough, you're likely to be bombarded with information and pitches on television, on the radio and in print over the next few months too.

What's behind the communication explosion is nothing short of the most comprehensive changes to the Medicare system in its 40-year history. Uncle Sam is cranking up the machinery to deliver coverage for prescription drugs for the first time ever, through either stand-alone drug policies or an expanded network of managed-care plans.

The details will be complicated. The number of options will be staggering. So will the possibilities for confusion.

But the potential for savings is also great for the nearly 42 million elderly and disabled Americans who have most of their health-care bills paid by Medicare. The average participant is expected to save 37 percent on out-of-pocket drug costs, with low-income seniors, people who currently don't have drug coverage and those with catastrophic medical costs emerging as the biggest winners.

In short, if you're a Medicare beneficiary -- or you love someone who is -- you've got some serious choices to make in the months ahead.

"A lot is being asked of this population, many of whom may be coping with chronic illnesses, juggling multiple prescriptions and who probably haven't shopped for health benefits in years," says Stuart Guterman, the Medicare program director at the Commonwealth Fund.

Keep clicking for answers to your most pressing questions about the new Medicare.

How does the new drug benefit work?

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Click here for more on MONEY Magazine's special report, The Dream Retirement.  Top of page

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