...Well...actually, some of us are.
But even those of us not yet old enough for Medicare have two reasons to think about it now:
- We help our parents make their Medicare coverages decisions, and/or
- Knowing which type of coverage you'll want will determine if some additional saving is in order.
Q. Which parts of Medicare are automatic; which are not?
A. Part A (hospital insurance), Part B (medical insurance, for which you pay a monthly premium, currently $104.90; it can be deducted from your SS check if you wish), Part C (Medicare Advantage) and Part D (prescription drug coverage). You get Parts A and B of the Original Medicare plan when you’re automatically signed up for Medicare. To get Part C and/or drug coverage under Original Medicare, you must choose and join a Medicare-approved Medicare Advantage/Part D private drug plan.
Q. What is the difference between Medicare Advantage (Part C) and a Medicare Supplement (also known as Medigap)?
A. Medicare Advantage (Part C) plans are an alternative to Original Medicare. They are are offered by private insurance companies and cover all Medicare-covered services; some include eye/dental care as well. As with any private insurance plan, they have various limitations. Depending on the plan you choose, you may have to pay an additional premium on top of your Part B premium.
Medicare Supplement coverage (Medigap) is a fixed-cost separate plan, also with a monthly premium, that works with Original Medicare and covers the remaining 20% for which you would be responsible. Anything Medicare covers, your supplement will cover as well.
A. This covers all pharmacy medications.
What is covered and by how much (eg what your out-of-pocket is) depends on the plan you choose. It is recommended that you choose a plan based on your most used drugs each year. All plans have a coverage gap or "doughnut hole" once you've reached a certain level of spending which closes after you've spent a certain amount above that (who's idea was this??). The Affordable Care Act gradually reduces the coverage gap or doughnut hole until it disappears in 2020.
Generally, if you have TRICARE, you don’t need to enroll in Part D.
A. Medicare pays 80% of doctor/hospital/lab/testing/hospice costs, and a certain number of nursing facility days/home nursing care visits and alternative care visits (eg chiropractic/acupuncture, etc.) per year; you are responsible for the rest.
Medicare does not pay for eye or dental care, nor does it pay for long-term care.
- if you take many and/or high tier medications, you'll want to start saving extra to cover their costs (and your "doughnut hole" costs, at least until 2020 of if the ACA is repealed)
- if you have many or unusual medical needs (go out of state for care; need extensive or want cutting edge treatments for instance) you'll want to get Medigap (supplement) coverage rather than a Medicare Advantage plan due to its many limitations. Plan to afford this top notch coverage.
- You must buy separate dental/eye plans (unless you go with an Advantage plan that includes them) or prepare to pay for eye/dental care out of pocket; either way add these costs to your saving plan
- 1 in 4 Boomers are projected to need assisted living or another type of long-term care (OK, I'm officially depressed...); you can either purchase long-term care insurance now (warning, it's expensive), or plan to place your assets in an irrevocable trust if/when that time comes - cost, approximately $6K (including legal fees so you can qualify for Medicaid to pay for a long-term facility). Either way, add these costs into your savings plan.
- No cardiologist in FL could help my father with his advanced coronary artery disease; they'd pretty much sent him home to die. We wanted to take him to one of the finest cardiologists in the country, who practices in NYC (Dr. Dangas has been a guest on the show), but Daddy's Medicare Advantage plan wouldn't cover it so he switched to the AARP supplement. His out of pocket would have been in the $10K's with Medicare Advantage, vs. his monthly premium of $225 with the supplement; or he would have simply gone home to die years earlier than he did. Dr. Dangas saved Daddy's life numerous times thereafter.
- A neighbor who has Medicare Advantage needed specialized eye surgery and wanted to use a top-notch provider; unfortunately that doctor was not on his plan so he was forced to use a lesser practitioner.
You have been officially alerted.