While you may have heard of Medicare before, you might not know exactly what it is and how it works. Medicare is a government health insurance program available to all U.S. adults 65 years old and up, as well as younger people with disabilities. As you grow older, Medicare plays an integral part in managing health care costs and medical insurance so it’s important to understand how Medicare works.
What Is Medicare?
Medicare consists of four different parts:
Part A: Coverage for hospital care and skilled nursing facility care.
Part B: Coverage for doctors’ appointments, outpatient medical care, and preventative care services.
Part C: Coverage for the same services as Part A & B but offered by private insurance companies to provide additional benefits of vision, hearing, and dental care.
Part D: Coverage for generic and brand-name prescription medication.
There are also two Medicare options, Original Medicare and Medicare Advantage. Original Medicare includes Part A and Part B for coverage while Medicare Advantage, also known as Past C, must be obtained through a private insurance company and includes Part A, Part B, and other benefits depending on the insurance company.
What Does Medicare Cost?
If you qualify for Medicare, that does not mean that you are 100% covered and do not have any health care expenses. Each part of Medicare has its own costs associated with it.
Part A: Most people have a $0 premium for Medicare Part A but if you do not qualify for premium free Part A, you can have a premium up to $499 a month in 2022. Your deductible for coverage is $1,556 in 2022.
Part B: The premium for Part B starts at $170.10 in 2022 with a deductible of $233 for the year.
Part C: For Part C, you will have to pay the premium of Part B and potentially an additional premium from a private insurance company. For 2022, there is an out-of-pocket limit of up to $7,550.
Part D: The premium for Part D varies depending on the private insurance company but the average for 2022 is $33 a month.
How Do I Qualify For Medicare?
To qualify for Medicare you must be:
- 65 years old.
- A U.S. citizen or a permanent legal resident for at least 5 years.
How Do I Sign-Up For Medicare?
Your enrollment period for Medicare begins three months before your 65th birthday and ends three months after you turn 65, so you have a total of six months to sign up. If you are receiving Social Security benefits at age 65, you are automatically enrolled in Medicare Part A and Part B. If you are not receiving Social Security, you will have to enroll for Medicare on the Social Security website.
There is also open enrollment for Medicare members every year from October 15th to December 7th. During the open enrollment period, you can change your Medicare Part D plan, pick a new Medicare Advantage plan, or change from Original Medicare to Medicare Advantage and vice versa.
If you miss your initial enrollment window, you will have to pay late feeds.
What Isn’t Covered By Medicare?
Medicare does not cover long-term care services, such as assisted living, home health aides, and long term nursing home stays.
Original Medicare also does not cover:
- Dental Care
- Eye Care
- Hearing Aids
- Most Chiropractic Services
- Routine Foot Care
Switching from employer-sponsored health insurance can be scary, especially with the change in premiums and out-of-pocket costs, so it’s important to have a knowledgeable and experienced professional on your side. For assistance in building a retirement planning strategy and budget that fits your needs, contact me for help at 402-454-7204 or email me at jason@fp-wealth.com Schedule a consultation today to get started!
Sources:
https://www.nerdwallet.com/article/insurance/medicare/what-is-medicare
https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare
https://money.com/what-is-medicare/
https://www.medicare.gov/basics/get-started-with-medicare/medicare-basics/how-does-medicare-wor