When you reach the age of 65, you are automatically eligible for Medicare. But the popular belief is that it is free, which is wrong, and you have to know the nitty-gritties of the process before you actually sign up. Otherwise, you’ll find it very expensive.
Even after being on Medicare for years, you may still want to review your options annually, making sure that you’re on the right plan. Yearly, you can switch plans when you want to, from October 15 through December 7.
If you have a Medicare Part D drug plan or a Medicare Advantage plan, it becomes particularly important to go through your options yearly, considering that these two policies change features features from time to time, such as deductibles, copay amounts, covered drugs and the rest.
Medicare plans are split into the following categories:
Part A (Hospital Care, Skilled Nursing, Hospice and Some Home Health Care)
If you or your spouse has a Social Security work history spanning a minimum of 10 years, this Part costs nothing and your premium amount will depend on your Social Security work credits.
Part B (Doctor Visits, Preventive Care, Outpatient Care And Hospitals, And Some Home Health Care)
For 2018, this will be around $134 a month for majority of Medicare beneficiaries who earn $85,000 or less yearly ($170,000 for couples), and a maximum of $428.60 for those whose annual earnings surpass the $214,000 ($428,000 for a couple) mark. In addition to Parts A & B, most people would find a a Medicap plan useful.
Part C – Medical Advantage Plan
Some private companies contract with Medicare to provide all Part A and Part B benefits, while many plans also offer Part D coverage. The premiums will depend on the plan and the region, but the average for the Medicare Advantage plan in 2018 is $30, or 6% lower than a year earlier.
Part D – Prescripton Drugs
The average premium in 2018 is $33.50, lower than the $34.70 average in 2017.
The first important decision Medicare beneficiaries must make is whether they shoudl go for traditional coverage (Parts A, B and D) or a Medical Advantage plan (Part C). While Medical Advantage plans have low to zero premiums, members are usually limited to specific hospitals and doctors. These two options have deductibles, copoays and coinsurance, which requires you to shoulder a part of the bill.
If you opt for traditional Medicare, simply add a Medicap policy, which is supplemental in that it takes care of whatever Medicare doesn’t. Medigap policies come in 10 types, and each one is provided by a private company or group, with costs varying significantly from product to product. You’d like to review each plan as thoroughly as possible in order to make the smartest choice.