Philip Moeller is that rare person who gets two streams ofincome from Social Security. Like millions of other olderAmericans, he gets a monthly benefit. But he also gets anadditional income stream from the unlikely bestseller heco-authored, Get What's Yours: The Secrets to Maxing OutYour Social Security.

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That book's runaway success — it spent 25 weeks onthe New York Times bestseller list — gotMoeller, 70, thinking about another complex and crucialgovernment safety-net program: Medicare. His new book, Get What's Yours forMedicare: Maximize Your Coverage, Minimize Your Costs, comesout on Tuesday.

Bloomberg spoke with Moeller about how to get the most outof your Medicare dollars, and why it's smart for even veryaffluent Americans to enroll. The interview was lightly edited forspace and clarity.

Is Social Security, the book, going to make yourich?

If I live a really long time, that might be true. The book is anannuity that I hope will pay a modest return for a very longnumber of years.

I waited to claim Social Security until I was 70, and mybenefits are going to be really nice for the rest of of my life. Mywife will do the same thing. She's 66 but got grandfatheredin the new law that ended the ability to usea strategy called "file and suspend" that we wrote about in thebook. [One of Moeller's co-authors, Boston Universityeconomist Larry Kotlikoff, estimated that the strategycould add $50,000 to a couple's lifetimebenefits.] Larry was told by people within SocialSecurity that the book was responsible for changing the law aboutthe claiming technique, which we're not terribly proud of.

You'd think affluent people wouldn't use Medicare, sincethey have better options and the money to get health care outsidethe program. Is that true?

Smart, affluent people should absolutely use Medicare as avehicle to protect assets. Heath-care expenses are the biggestuncontrolled expense that most older Americans have in their lives.The average lifetime out-of-pocket for an average American is about$250,000 — but that is an average. Having a lot of money skews thataverage, because wealthier people invariably spend more on healthcare, because they can afford it and have higher out-of-pocketexpenses.

I have a good friend who became very wealthy and retired in hisearly fifties. For the last 20 years, he's lived a wonderful,affluent lifestyle. He can afford to self-insure his health care,but he doesn't. He has Medicare, because it saves him a tremendousamount of money. Until recently, he didn't have a MedicarePart D drug plan because he didn't take any expensive medications,so figured he didn't need it. He's now recognized that the drugcoverage is a wonderful catastrophic insurance policy against thesevery wonderful but very expensive new medications that odds aremore and more of us will need to take when we get old.

He signed up for Part D but was five years late inenrolling, so has to pay like a 50 percent premium penalty for therest of his life. That's the nature of Medicare penalties whenyou're late in enrolling.

Let's take an example of an older married couple, in theirearly sixties, on employer-sponsored health care insurance.How should they be thinking about Medicare?

First, make sure you understand when to sign up, so you avoidlate-enrollment penalties. They are horrible and can be verydamaging, and they last literally forever. Another reason why it'simportant to sign up on time is that you don't want to findyourself without coverage because you're late in enrolling. That'sthe more serious consequence. If, for example, you turn 65 andyou're slow in signing up for Medicare, and your employer's policyends your coverage and you have an adverse health event and noprimary health insurance, you are in a world of hurt.

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The traditional enrollment window for someone turning 65 is thatyou can enroll three months before your birthday month and threemonths after. But if your insurance with an employer ends duringyour birthday month (say, September) because you retire, it doesn'tdo you much good to wait to enroll until November — because you mayavoid the late enrollment penalty, but if you get hit by a car youdon't have any insurance. Your Medicare coverage will start on Jan.1, in this example, and you will have a gap betweencoverage. Don't get too enamored of saving a dollar here orthere by deferring enrollment until late in the enrollmentperiod.

Also, there's no family plan with Medicare. A lot of couples getthe same Medicare policies, even some otherwise very intelligentfriends of mine. Life is easier when it's simpler. But it doesn'tmake sense unless their health profiles are identical.

What advice do you have for people who want to buy additionalinsurance to cover some of what Medicare doesn't?

When you sign up for Medicare, most people buy Part A, whichcovers hospital stays, and Part B, which covers doctors,outpatient and medical equipment expenses, and then decide onadditional products.

Usually you need a Part D drug plan, and then there are twoproducts — Medigap (or Medicare supplemental insurance, as it'salso called) and Medicare Advantage plans. They are sold by privateinsurers and cover many of the expenses that basic or originalMedicare does not. You buy one or the other. It's illegal forinsurance companies to sell both of these to the same person,because they cover a lot of the same things.

Medicare Advantage also comes with Plan D rolled in. These areusually easier to use, because you have one insurance product youdeal with for all your Medicare needs. But Medicare Advantage plansmake their money by restricting policyholders' access to care byrequiring them to use caregivers in the plan's provider networks.(I joke in the book that the letters HMO still cause shuddersin marketing circles, but these plans are basically HMOs. Some arevery good, though; Kaiser Permanente's plans have a greatreputation.)

Most affluent people don't take that route, because they want touse whatever health-care providers they need to take care ofthemselves and their loved ones. That's what you can do with basicMedicare. If you use Parts A and B, you can use whateverhealth-care provider in the U.S. works with Medicare, and almostall of them do. So wherever you are in the U.S., you can gethealth-care services. If you are traveling and you need aprescription, you can go into the local pharmacy and Medicare willfill it. That's often not the case with Medicare Advantageplans.

What are other big trade-offs?

Traditional Medicare has great flexibility but large coveragegaps. Plan B pays only 80 percent of covered expenses. You pay 20percent, and there's no annual ceiling. You can largely close thatbig hole by buying a Medigap plan. There are 10 different so-calledletter plans that you can buy.

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With Medigap, the policies are regulated by the states, but whatthey cover is dictated by Medicare. The most popular Medigap planis F, which covers the most, and the C plan is a close second. Ifyou have F, regardless of where you are in U.S., every F plan hasto cover same thing, because federal rules dictate whatthat plan and all the other letter plans cover.

The only real variation in Medigap plans is the premium — andthere is an enormous range.

The more we write about the premiums, hopefully the smaller therange will be. But if you don’t shop for a plan, you are leavingmoney on the table in most cases. Fortunately, there's a tool onMedicare’s website that helps you shop for Medigap plans.

Insurance companies would argue that the quality of customerservice is a differentiator in terms of plans. I think that is anice-sounding phrase. I’d shop based on premium, and that should bealmost all the due diligence people need to do.

Affluent people who travel a lot outside the U.S. need to docareful Medigap shopping. It provides limited coverage for medicalexpenses incurred outside the U.S. — usually of an emergencynature. Traditional Medicare doesn’t cover you outside the U.S.Some Medicare Advantage plans offer emergency coverage outside theU.S.

Affluent people can also get hit with bigsurcharges. What's the situation there?

There's something called IRMAA, which stands for "income-relatedmonthly adjustment amount." Wealthier individuals have to payhigher percentages of their Medicare expenses for Part B and Dpolicies.

If you earned more than $124,000 this year — and that's modifiedadjusted gross income, or MAGI — the Part B surcharge can be reallystiff. If "normal" people pay $105 a month for Part B, thehighest-earning individuals in the U.S. pay nearly $390 a month, orquadruple.

Another important thing is that IRMAA is based on your tax returnsfor two years ago, and IRMAA can be influenced by one-time events.If you sell a vacation home that has no lifetime gainexclusion, for example, you got a slug of one-time income — and itwill play havoc with your IRMAA surcharge. If you have a financialadviser, they should be factoring in this time element, in terms ofhow they plan for your Medicare premium.

What plan do you use?

The Medicare Advantage plan disadvantages are unacceptable, aslong as I have the financial resources to get Medigap.

Medigap is a lot more expensive — you easily could spend severalthousand more a year in premiums than for comparable coverage, interms of out-of-pocket costs for Medicare Advantage.

And again, Medicare Advantage restricts you to their providernetwork, which to me, as a beneficiary, is a point of concern. ButMedicare Advantage does have out-of-pocket payment protections, soare attractive for that reason.

There was legislation passed last year that changed Letter Fand C plans. How does that affect people?

These plans are the only two Medigap plans that providefirst-dollar coverage of Part B deductibles. That deductibleis now about $166 and may rise above $200 next year, becausehealth-care expenses are going up. Congress decided that peopleneeded more skin in the game and that those two plansdiscouraged people from taking proper responsibility for theirhealth-care spending needs.

As of 2018, newly sold Part F and C plans will no longer provide first-dollar coveragefor Part B deductibles. If you already have a Part C or F plan, orbuy one in the next couple of years, you're grandfathered, and yourplan will continue to cover this deductible.

The rub: If you look at risk pools in insurance in terms of howcompanies determine rates, if no one buys F and C plans as newinsurance products in 2018, the pool of people with those plans isgoing to tend to skew older and sicker over time. So if you haveone of those plans, it may become increasingly less attractive.

Another tough issue is that when you switch Medigap plans,you do not necessarily have the same guaranteed rights of coveragethat you did when you first signed on. It can be hard to replace apolicy at as attractive rates as when you bought it. So if you’resailing along and then your F plan rate gets jacked up, there’s notan easy fix.

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