Shelley EMedicare is a health insurance program from the government that can help seniors pay at least some of those ever-increasing medical costs. Here are some Medicare basics everyone should know as they head towards retirement.
What does Medicare cover?
There are several parts to Medicare, and each covers different expenses. Medicare Part A deals with hospital care. Part B handles outpatient services and doctor’s visits. Medicare Part D, meanwhile, offers prescription drug coverage.
In addition to those forms of coverage, there are Medicare Advantage plans. Private insurance companies offer these, which are an alternative to standard Medicare. When shopping for Advantage Plans, be on the lookout for differences in restrictions and premiums.
How much money gets paid into Medicare?
When you work, 1.45 percent of your wages enter the Medicare system from both you, the worker, and your employer. If you’re self-employed, you’ll pay both portions, meaning 2.9 percent of your income goes towards Medicare.
The health insurance system gets extra funding from individuals who earn over $200,000 and couples who make over $250,000. This Medicare tax takes an extra 0.9 percent of their incomes.
When are Medicare’s enrollment deadlines?
Medicare was created with retirees in mind. As such, there’s a seven-month window to enroll that includes:
- The three months prior to your 65th birthday.
- The month of your 65th birthday.
- The three months after your 65th birthday.
The month you turn 65 is when Medicare’s coverage can officially begin.
It’s important to enroll during the initial seven-month enrollment period. If not, you could be subject to a late enrollment penalty that lasts as long as you have Medicare.
Having group health insurance from your current job could keep you from signing up on time. If so, you can avoid the penalty by enrolling for Medicare within eight months of the coverage ending or leaving the job.
What are the Medicare premiums?
Medicare Part A usually does not call for a premium. Medicare Part B, on the other hand, has a standard premium of $144.60 per month. This number may change according to the year.
If your modified adjusted gross income is over $87,000 as an individual or over $174,000 as a couple, your monthly Medicare premium can increase to anywhere from $200 to almost $500.
Does Medicare have out-of-pocket costs?
Medicare Part B has a $198 deductible. Once that is met, most services will run you 20 percent of an amount that Medicare approves.
If you are hospitalized, Medicare Part A has a $1,408 deductible per benefit period. If you have to stay in the hospital for over 60 days, you may be looking at additional costs.
Medicare does not have a yearly limit for out-of-pocket costs.
Does Medicare offer free preventive services?
Yes, and they can include:
- One yearly wellness doctor’s visit (any tests performed could cost extra).
- Certain cancer screenings.
- Flu shots.
How does Medicare deal with prescriptions?
You’ll need to research the different Medicare Part D plans. Each varies in what medications they cover, plus their premiums and copays. Since coverage and costs tend to change each year, your best bet is to use the annual Medicare open enrollment period to look for a new plan.
Is there a way to supplement Medicare?
Yes, and the solution is called a Medigap plan. It can pay for some out-of-pocket expenses associated with Medicare.
What does Medicare not cover?
It’s unfortunate, but Medicare doesn’t cover many services that are often needed by seniors, such as:
- Over 100 days of nursing home stays or long-term care.
- Hearing aids.
- Dental care.
- Eye exams.
- Glasses.
- Contact lenses.
Mark Luigi
