Three important facts about Medicare insurance: not knowing them can cost you a pretty penny
Medicare can seem like a maze when you first try to get through it. AT after all, the federal health insurance program has different "parts" that cover about 56,5 million people aged 65 and over. When you switch to Medicare, there are a few important things to consider about Medicare that can make a big difference in your wallet. Writes about it CNBC.
But first, it's worth learning the basics: Original Medicare is made up of Part A (hospital coverage) and Part B (outpatient care).
Some beneficiaries choose to receive these benefits through an Advantage Plan (Part C), which usually also includes prescription drug coverage (Part D). Others stick to original or basic Medicare, and possibly combine it with a separate Part D plan and what's called a Medigap policy.
Here are three key points to keep in mind.
1. It will cost you money
Medicare is not free.
“This came as a surprise to so many beneficiaries who paid payroll taxes throughout their working lives and assumed that this would mean Medicare would be ‘paid for’ by the time they turned 65,” Danielle Roberts said. , co-founder of insurance company Boomer Benefits.
“The taxes you paid give you the right not to pay Part A premiums, but Parts B and D have premiums that beneficiaries pay monthly for as long as they use these plans,” Roberts said.
Free Part A is available if you have at least 10 years of experience in America. Otherwise, monthly premiums could be up to $499 in 2022, depending on whether you paid any Medicare taxes at all. However, people who do not have their own seniority may also qualify for free Part A if their spouses have the necessary experience.
Part A also has a $1 deductible that applies to the first 566 days of hospital inpatient care. From days 60 to 61, $90/day, then $389/day. Once you've paid your franchise fees, you'll usually need to cover 20% of the cost of your hospital stay, with insurance covering the rest.
Meanwhile, the standard monthly installment for Part B this year is $170,10. However, some beneficiaries pay more through income-adjusted allowances.
“Many high-income workers are shocked at how much their Medicare premiums will cost them when they retire,” said Elizabeth Gavino, founder of Lewin & Gavino and an independent broker and general agent for Medicare plans.
The government uses your tax return two years before you retire to determine if you will pay extra for Medicare. To request a reduction of this amount, the Social Security Administration has formwhich you can complete online.
Part B is also franchised: $233 in 2022. Once fees are paid, beneficiaries are usually responsible for 20% of the cost of covered services.
Premiums, deductibles, and Part D copayments vary by coverage. The median premium this year is about $32, according to the Centers for Medicare and Medicaid Services. And like Part B, people with higher incomes will be charged extra.
2. Missing key deadlines can mean extra spending
If you plan to enroll in Medicare, once you become eligible, you will receive a seven-month "initial enrollment period" that starts three months before the month of your 65th birthday and ends three months after it.
Meanwhile, if you delayed enrolling in Medicare because you were still working after age 65 and your employer's coverage was acceptable (as per Medicare standards), you must enroll in Medicare within eight months of the end of your health plan. workplace.
Regardless of the enrollment rules to which you are subject, failure to meet the Part B enrollment deadline may result in a lifetime late enrollment penalty. For each full year in which you should have been covered but did not apply, you will pay 10% of your monthly standard Part B premium.
Part D also has a late entry penalty if you miss the deadline. The penalty is 1% of the National Basic Premium for each month you did not have Part D.
3. Additional insurance may make sense
Different Basic Medicare costs may vary if you have additional coverage.
One option is to sign up for an Advantage plan. While you usually continue to pay your Part B premium in this case, many Advantage plans have low or no premiums. In addition to regular prescription drug coverage, Advantage Plans may also offer additional services such as dentistry, vision and hearing tests.
Unlike Basic Medicare, Advantage Plans have a limit on out-of-pocket spending. Their cost-sharing structures—that is, deductibles, co-payments, or fees—also differ and vary from plan to plan.
However, the annual contribution cap can be high, averaging $2021 in 5, according to the Kaiser Family Foundation. You may also be required to visit only certain doctors, hospitals, and pharmacies.
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“These plans have networks of providers, and some plans will require you to choose a primary care doctor and get referrals to certain doctors and prior approvals for many of the more expensive procedures, tests and surgeries,” Roberts said.
Another option is Medigap, which takes some of the cost-sharing associated with basic Medicare, such as a Part A deductible or Part B co-payments. These policies are also offered by private insurance companies, but are generally standardized—plans with the same name offer the same benefits regardless of which insurer sells them. The available Medigap policies are labeled A, B, C, D, F, G, K, L, M, and N, and each offers a different level of coverage.
Prices for such policies can vary greatly depending on the insurance company and where you live. According to the American Medicare Supplemental Insurance Association, a 65-year-old woman in Dallas may pay less than $100 per month for Plan G, while the same person in New York would pay $278.
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