Yahoo Finance 10 Things You Need to Know About Medicare
Maximizing Medicare
Medicare pays for much of the cost of hospital stays and doctor's office visits for people age 65 and older. This government health insurance program has also more recently added preventive care and prescription drugs to its covered services. Here's how to make the most of your Medicare benefit.
What's covered.
Hospital care is covered by Medicare Part A. Medicare Part B is medical insurance that covers doctor's visits and outpatient services. Medicare Advantage Plans or Medicare Part C are an alternative to traditional Medicare offered by private insurance companies, typically with different premiums and restrictions. Prescription drug coverage is offered through Medicare Part D.
How much you are paying in.
Employees and employers each pay 1.45 percent of the worker's wages into the Medicare system. Self-employed workers contribute 2.9 percent of their income. People who earn more than $200,000 as individuals and $250,000 for couples pay an additional 0.9 percent tax.
Enrollment deadlines
You can first sign up for Medicare during the seven-month window around your 65th birthday. Coverage can start beginning the month you turn 65. If you fail to sign up during this initial enrollment period, you could be charged higher premiums for the rest of your life. If you delay Medicare enrollment due to group health insurance through your current job, sign up for Medicare within eight months of leaving the job or the coverage ending to avoid the penalty.
Premium amounts
Most people don't pay a premium for Medicare Part A. The standard Medicare Part B premium is $134 per month in 2017, but it is primarily new enrollees and those who haven't yet claimed Social Security who will pay this amount. Most Social Security recipients will pay $109 per month for Medicare Part B in 2017 because Medicare premiums are prevented by law from increasing faster than Social Security payments for existing recipients. Premium costs are also higher for retirees with a modified adjusted gross income above $85,000 for individuals and $170,000 for couples. Medicare Part D premiums vary depending on the plan you select.
Out-of-pocket costs
There's a $183 Medicare Part B deductible in 2017, after which you will be charged 20 percent of the Medicare-approved amount for most services. There's no annual limit on out-of-pocket costs. Medicare Part A has a $1,316 deductible if you are hospitalized, and additional costs apply if your hospital stay exceeds 60 days.
Free services
Medicare provides many preventive care services without any cost-sharing requirements, including flu shots and mammograms. Beneficiaries are also eligible for a free wellness doctor's visit once each year. However, tests performed during the wellness visit could result in additional charges.
Prescription drug coverage
Retirees must choose between an average of 22 Medicare Part D prescription drug plans, which each have different covered medications, premiums and copays. The covered medications and their costs also change annually, so it's a good idea to shop around for a new plan each year during the open enrollment period.
How to make changes.
Medicare beneficiaries can make changes to their Medicare Part D prescription drug coverage each year during the open enrollment period from Oct. 15 to Dec. 7. This is a good time to check that the medications you use will continue to be covered at an affordable price and to switch plans if they won't.
How to supplement Medicare.
A Medigap plan will pay for some of traditional Medicare's out-of-pocket costs. Remember to purchase a Medigap policy during the six-month period when you're 65 or older and enrolled in Medicare Part B. You could be charged significantly higher premiums or denied coverage if you try to buy a policy after that point.
What's not covered.
Medicare typically doesn't cover eyeglasses, dental care or hearing aids. Medicare also won't pay for more than 100 days of long-term care such as nursing home stays or assisted living.
More From US News & World Report
