When you reach the age of 65, you are automatically eligible for Medicare. But as opposed to popular belief this plan doesn’t come for free, and you need to know its mechanics before actually signing up. It can be insanely expensive if you don’t.
Even if you’ve been on Medicare for a long time, re-evaluating your options yearly will make sure you still have the right plan. The yearly open enrollment period, during which you can switch plans when you want to, is from October 15 to December 7.
It’s very important to review your options if you have a Medicare Part D drug plan or a Medicare Advantage plan, since these two usually change every year in terms of covered drugs, doctors, copay amounts and other features.
Medicare plans come in four different classifications:
Part A (Hospital Care, Skilled Nursing, Hospice and Some Home Health Care)
If you have a minimum Social Security work history of 10 years, you pay nothing for this, and your premium amoutn will be determined by your Social Security work credits.
Part B (Doctor Visits, Preventive Care, Outpatient Care And Hospitals, And Some Home Health Care)
In 2018, this is going to average $134 monthly for most beneficiaries with yearly incomes equal to or not exceeding $85,000 ($170,000 for couples), and as much as $428.60 for those who earn more than $214,000 ($428,000 for a couple) annually. In addition to Parts A & B, most people would find a a Medicap plan useful.
Part C – Medical Advantage Plan
You will find private companies partnering with Medicare to offer a combination of Part A and Part B coverage, with some plans even providing Part D benefits. Premiums differ according to plan and region, but the Medicare Advantage plan average in 2018 is $30, lower by 6% from the past year.
Part D – Prescription Drugs
Premiums in 2018 average $33,50, which is lower than last year’s $34.70.
The first crucial decision Medicare beneficiaries have to make is whether they should chose traditional coverage (Parts A, B, and D) or a Medical Advantage plan (Part C). Medical Advantage plans have small to no premiums at all, but members usually have to limit themselves to certain hospitals and physicians. Both come with deductibles, copays and coinsurance, where you need to foot 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. There are 10 types of Medicap policies offered by private companies or groups, and the costs vary significantly. To determine the best choice, examine each plan carefully.