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. It can be insanely expensive if you don’t.
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. October 5 to December 7 is the yearly open enrollment period, during which you can change your plan if you think it’s necessary.
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 come in four different classifications:
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)
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. 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
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 can have low or zero monthly premiums, but they often restrict members to certain doctors and hospitals. 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. 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. To determine the best choice, examine each plan carefully.