Upon reaching the age of 65, you become eligible for Medicare. But contrary to popular belief, this health plan is not for free, and you have to understand everything about it before signing up. It can be expensive otherwise.
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, the more it becomes important to review your options yearly, since these two plans change certain features every now and then, like covered drugs, copay amounts, etc.
Medicare plans come in four different classifications:
Part A (Hospital Care, Skilled Nursing, Hospice and Some Home Health Care)
This Part is free for those who have a Social Security work history of no shorter than 10 years, and their premium will be dictated by the number of Social Security work credits they have.
Part B (Doctor Visits, Preventive Care, Outpatient Care And Hospitals, And Some Home Health Care)
In 2018, this averages to $134/month for most beneficiaries who yearly earnings do not exceed $85,000 ($170,000 for couples), and up to $428.60 for whose with annual incomes of $214,000 ($428,000 for a couple) or more. If you’re like most people, you will probably need a Medigap plan on top of Parts A & B.
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 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 choose traditional Medicare, you can just add a Medicap policy, which is a supplemental policy that takes care of what isn’t covered by Medicare. There are 10 types of Medicap policies offered by private companies or groups, and the costs vary significantly. You’d like to review each plan as thoroughly as possible in order to make the smartest choice.