What do you really know about Medicare? – The madman

Although 86% of older Americans are currently enrolled or planning to enroll in Medicare, 72% say they do not fully understand how the program works and would like to know more about the program, according to a survey by Nationwide Retirement Institute and Harris Poll.

Not understanding how Medicare works can be an extremely expensive mistake. Health care is one of the largest expenditures of Americans in retirement: the average 65-year-old would spend about $ 280,000 in health care costs only during their golden years, according to Fidelity Investments. If you do not fully understand what you sign up for when you sign up for Medicare, you risk paying more than you expected – and emptying your retirement fund at the same time.

There are several misconceptions about Medicare, and the more you understand how it works, the better you will be in retirement.

Myth # 1: Medicare covers all your health expenses

In general, Medicare usually covers medically necessary care. Services such as hospital visits, specialized nursing care, x-rays and laboratory tests, for example, are generally covered by Medicare Parts A and B (or by original Medicare). However, most Medicare covers do not cover the full cost of services. For example, Medicare covers 80% of the medical care covered by Part B, leaving you responsible for the remaining 20%. In addition, some services, such as dental care, routine eye exams and hearing tests, are not covered at all.

If you go on foot 20% of the bill can be expensive. In addition, Parts A and B do not cover prescription drugs either and you must register for Part D of Medicare to qualify for drug coverage.

There are several ways to address these gaps in coverage. Some people turn to a Medicare Advantage plan (sometimes called Medicare Part C) instead of the original Medicare system. Advantage plans are offered by private insurance companies – similar to the insurance you've probably underwritten by your employer – and they generally cover not only everything covered by Medicare Parts A and B, but also a little more . Not all Advantage plans have drug coverage, but many do. Alternatively, those who prefer the original health insurance often choose to obtain a complementary Medigap insurance policy to fill the coverage gaps. Whatever the case may be, you have a wide variety of options to meet all of your health care needs.

Myth # 2: coverage is free

According to the Nationwide survey, more than half of older Americans mistakenly believe that you have nothing to pay for Medicare. Even though Medicare covers a large portion of your health care expenses, you still have to pay premiums, deductibles, copays or co-insurance – and these expenses can add up.

For original Medicare, you do not need to pay a monthly premium for Part A coverage (as long as you have paid taxes during your career). However, for 2019, you will have a deductible of $ 1,364, as well as co-insurance fees. For Part B, you pay a monthly premium of $ 135.50 with a deductible of $ 185 per year. Once you reach the deductible, you will pay 20% of your personal expenses.

For Medicare Part D and Medicare Advantage and Medigap plans, costs will vary depending on the plan. There are dozens of plans available, each slightly different. You will have to do your research to determine which is the most profitable for your unique situation.

Myth # 3: You can register anytime

Although you can not register at any time, you can register several times. If you sign up for Medicare for the first time, you have between three months before your 65th birthday and three months after your 65th birthday to sign up. There are also special registration periods that apply in certain situations, such as a change in family status or the loss of employer coverage for those who are still working when you are in business. 39, they reach the age of 65. These special registration periods give you another opportunity to sign up for Medicare Parts A and B. or an Advantage plan.

In addition, for part D plans in particular, other situations may trigger special registration periods, such as moving to a new area that your current provider is not serving or if your current plan stop serving your site.

You also have the option to register during the general registration period and the open registration period. The general registration period runs from January 1 to March 31, during which time you can only sign up for Medicare Parts A and B. The open registration period is more flexible. It runs from October 15 to December 7, and you can switch from the original Medicare plan to an Advantage plan (or vice versa), subscribe to or opt out of Part D coverage, or opt for a new Advantage plan.

If you do not register during one of the normal or special registration periods, you will often have to pay a penalty when you register. For each year you were eligible for Medicare insurance but did not register, your monthly Part B premium will increase by 10% – for life.

Medicare is a confusing topic and most people do not particularly like to think about health insurance. But if you do not understand some of the ins and outs of the program, it could cost you a lot.