Medicare has made it possible for millions of older Americans to take care of their health and have medical problems treated. However, since the program is complex and has many rules, it is easy to get stuck. This is not a good thing if you are nearing retirement age and will soon be eligible for coverage. Here are some important things everyone should know about Medicare and how it works.
1. It’s expensive
One of the biggest misconceptions about Medicare that you may come across is that the program is free for seniors. But that’s hardly true.
Medicare Part A, which covers inpatient care, typically does not charge a monthly premium. However, you must pay a premium for Part B, which covers outpatient services. Part D drug plans also cost money.
In addition to insurance premiums, there are other expenses you may face as a Medicare enrollee. For example, there is a deductible that must be met under Part A each time you are hospitalized. You may also face coinsurance costs under Part B for the services you ultimately require. Part D plans, on the other hand, can come with high co-pays depending on the medications you take.
It’s important to anticipate and plan for these costs. In fact, if you have money in a Health Savings Account (HSA), aim to set it aside for retirement to help cover Medicare costs.
2. There are penalties for late registration.
Medicare eligibility begins at age 65, but the initial enrollment period is seven months. It begins three months before the month of your 65th birthday and ends three months after your 65th birthday.
You do not need to sign up for Medicare during the first period if you have eligible group health insurance at that time.And technically it’s not have You can register even if you are not covered by the applicable plan.
However, you should know that there are penalties for late enrollment in Medicare. If you are eligible for coverage every 12 months and do not enroll, you will incur a 10% surcharge on your Part B premium. In that case, be careful about when you take out your policy, as your premiums may be even higher.
3. Some services are not covered.
Medicare covers a variety of procedures, diagnostic tests, and preventive health care measures such as screenings and vaccines. However, there are many important medical services that cannot be paid for alone.
Medicare does not cover the cost of teeth cleanings, eye exams, or hearing aids. These are all important services related to general health, so it’s important to find out if you can pay for them out of pocket. Again, he said, an HSA could help here, so aim to bring in some retirement funds if that option exists.
4. You can explore alternatives, but they are far from perfect.
Clearly, Medicare is not a perfect program. It can be expensive and you may not even be paid for commonly needed services.
If you want to explore alternatives to health insurance, consider enrolling in Medicare Advantage. Medicare Advantage plans are offered by private insurance companies and generally cover services such as dental care and eye exams. In fact, many Advantage plans offer many additional benefits beyond what original Medicare offers, such as meal delivery services and fitness center allowances.
In some cases, Medicare Advantage may be more cost-effective than Original Medicare, but that’s not always the case. Advantage plans also limit you to a specific (sometimes very narrow) network of providers, so you may find it difficult to get care. If you choose Medicare Advantage over Original Medicare, carefully compare plan options and do thorough research before making a decision.
It’s important to do everything you can to stay healthy in retirement. The more you know about Medicare, the easier it will be to plan for expenses you may face. That way, you’ll be less likely to find yourself in a situation where you have to skimp on necessary services because of cost.