It's a shame how little the service is known to most people until they are right at the doorstep. While it is a national health insurance program that protects more than 50 million people, it is sometimes misunderstood, and just as you head into retirement, this can cause worry and financial stress.
Several years before it's time for you to enroll at age 65, it's a good idea to take a quick look at Medicare so that you are not caught off-guard by any misconceptions you might have had. Here are the main misconceptions that people believe about Medicare in order to get you started.
Many individuals falsely assume that the federal government would pay for 100 percent of their healthcare if they participate in Medicare. It's not real.
In the form of deductibles, copays, and coinsurance, you would have cost-sharing, much as on your health insurance before age 65. In 2019, Medicare Part A has a $1,364 deduction and this deductible is per benefit duration, so if you have more than one hospital stay, you might incur it more than once in a calendar year.
Part B has a $185 annual premium which then covers nearly 80% of the outpatient expenditures. For the other 20 percent, you will be accountable, and there is no out-of-pocket limit to cover you.
To help offset these cost-sharing costs, most beneficiaries opt to participate in either a Medicare Supplement plan also known as Medigap, or a Medicare Advantage plan.
You have six months from the Part B effective date to participate in a Medicare Supplement Plan with no health questions asked when you enroll in Medicare Part B. This six-month Medigap open enrollment window is designed to ensure that you can get decent coverage even though you have health issues when you move to Medicare.
You can still apply for a Medigap plan after the time has passed, but you'll need to answer health questions in most states. The insurance provider can refuse you due to certain health conditions and medications. In other words, if they think you pose a medical risk, they do not need to cover you.
People also wrongly assume that without health questions, they should only wait until the next fall Annual Election Period (AEP) and sign up for Medigap. The truth, however, is that the collapse of AEP has little to do with plans for Medigap. The AEP allows you to make modifications to either your Part D drug plan or your Medicare Advantage plan, instead.
Any time of year, you can apply for a Medigap plan, but if you are past your six-month Medigap open enrollment period, prepare to answer health questions and know that it is not guaranteed to get coverage.
This one is another common error that costs a ton of money in late fines for unsuspecting recipients because it is only partly valid.
If you work with 20-plus workers with a large company, then yes, without penalty, you can delay Medicare enrollment. Your insurance coverage for the employer group is primary, and Medicare is secondary.
"If you get this wrong, for every year you have been waiting for, you will have to pay a 10 percent penalty later."
However, if you work for a small company with less than 20 workers, Medicare is primary, then during the initial enrollment time, when you reach 65, you need to enroll in both Medicare Part A and B.
If you get this wrong, you will have to pay a 10 percent penalty later on each year you've been waiting to enroll. Your Part B premiums are added to this penalty, meaning you can pay it for as long as you are participating in Part B.
Polls suggest that more than half of Americans think Medicare is free of charge. This could not be further from the facts, and this misconception mostly has to do with the payroll deductions that you make during your working life.
The outpatient benefits of Part B and medication benefits of Part D have annual premiums that you need to be able to pay. The regular base premium for Part B in 2019 is $135.50 a month (increasing to $144.30 in 2020); this amount is payable by approximately 95 percent of Medicare beneficiaries.
When you get your paystub and see that you have paid FICA taxes on your future Medicare benefits, it will lead you to believe that you will be paid-up by the moment you turn 65. Those taxes, however, just go to pay for the hospital insurance from Part A.
A small percentage of recipients, however, are considered high-income, and these individuals pay what is called an IRMAA (income-related monthly adjustment amount). For Part B, those in the highest revenue bracket pay well over $400 a month.
Depending on the contract and the drugs it covers, Part D monthly rates are set by the insurance provider and can vary from as little as $10 to $15 a month to well over $150 a month. In addition to the base premium, high-income individuals pay an income-related monthly adjustment amount(IRMAA) too.
Also Read : What will it Cost You When you Join Medicare?
Private insurance plans are Medicare Advantage plans that are alternatives to conventional Medicare. The plans include local networks of providers. The premiums are cheaper in advance than the Medigap policies, and when you go along, you pay copays for healthcare instead. There might also be a $0 premium on certain HMO plans, which means you don't pay anything for the plan itself.
However, to be able to participate in either a Medicare Supplement or a Medicare Advantage plan, you must be enrolled in all Medicare Part A and B. So, even though your plan has low or even zero premiums, each month you will still pay for Part B.
In order to learn more about this, Social Security should have a class for individuals at age 50 because they only have 15 more years to save and prepare for retirement. However, such a class does not exist, but hopefully, this will help you avoid some of the most common errors.
Medicare is covered only by home health care services prescribed by a physician and delivered by qualified nurses, although patients must meet strict eligibility criteria.
What is the easiest way to apply for Medicare? Well, you are in the right place! Most people were automatically enrolled and became eligible for Social Security when they turn to 65. We didn't need to apply for Medicare until President Reagan signed the legislation which raises the retirement age in 1983 and begins in 2003.
While eye care is a common need as we age, Medicare coverage is extremely restricted for most vision services. It is normally based on whether you encounter any medical problems that can impair your eyesight.
Many people believe that Medicare is free because, for much of their working life, you have paid into Medicare by taxes, but that assumption is not right.
Often, Medicare premiums come as a shock to new Medicare recipients. You may have noticed that the federal government has been deducting taxes for years from your paychecks. And yes, these deductions go into paying your future payments for Medicare Part A as well as your income checks from Social Security.