This guide will help you or your parents navigate the complex world of Medicare and understand some of the lesser-known facts about this program.

Medicare can be a confusing topic for most people. Understanding what is covered and what is not, the potential penalties for signing up late, how to choose the right plan, and the importance of reviewing the plan annually are all important considerations when choosing the right Medicare plan. Whether you’re new to Medicare or have been enrolled for years, this guide is valuable for anyone looking to make informed decisions about their healthcare coverage. Let’s jump in!

1. Medicare Isn’t Free

Original Medicare is two parts: Part A, which covers hospital stays, and Part B, which covers physician visits. Part A has no additional premium if you or your spouse worked and paid Medicare taxes for ten years. However, it’s not free because someone paid taxes to get the benefit! Most people fall into this category. 

If neither worked the required ten years or 40 quarters, the premium for Part A is between $278 and $506 per month. Part B premiums range from $164.90 to $560.50 depending on the annual income from the previous two years (2021 income determines the 2023 premium).

2. Medicare doesn’t cover everything

Medicare doesn’t cover prescription drugs at all. You must buy a Prescription Drug Plan, PDP or Part D, from a private insurance company to protect yourself. Original Medicare is essentially an 80/20 insurance plan. The Part A deductible for 2023 is $1,600 per benefit period. A benefit period extends 60 days from the release of the hospital or skilled nursing facility. This means that a 4-day hospital stay in January followed by a hospital stay in April will result in two deductibles.

Part B is a true annual deductible of $226 for 2023. After the deductible, you are responsible for 20% of the costs. Unlike other insurance plans with a Maximum Out of Pocket, there is no cap on the 20%. To protect yourself from this unknown, you should evaluate a Medicare Supplement (Medigap) or a Medicare Advantage Plan (Medicare Part C). Both are available from a variety of private insurance companies. Except in certain circumstances, a member must keep Original Medicare (Parts A and B) in place when using a Medicare Supplement or a Medicare Advantage plan.

3. There are penalties for signing up late

These penalties apply to Parts B and D if you don’t have other creditable coverage.

If you don’t get Part B when you are first eligible, your monthly premium may go up 10% for each 12-month period you could have had Part B. In most cases, you’ll have to pay this penalty each time premiums are due for as long as you have Part B. The penalty increases the longer you go without Part B coverage,

The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage. Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($32.74 in 2023) multiplied by the number of full, uncovered months you didn’t have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to the monthly Part D premium,

4. One size doesn’t fit all

While it may be tempting to enroll in a plan because a friend or family member has done so, this approach can lead to unforeseen difficulties. Purchasing a Medicare Supplement, Medicare Advantage Plan, or Prescription Drug plan without carefully considering your needs can be a recipe for disaster.

It’s crucial to tailor the Medicare plan to your health needs to ensure you get the most out of your plan. Take the time to research your options and weigh the benefits and drawbacks of each plan. For example, if you have specific health conditions or require certain types of medication, you may need a plan with more comprehensive coverage. On the other hand, if you are relatively healthy and have few medical expenses, a more basic plan may be sufficient.

Ultimately, the key to finding the right Medicare plan is to do your homework and consider all of your options. By taking a thoughtful, personalized approach to your Medicare coverage, you can ensure you receive the care and support you need to stay healthy and happy in your golden years.

5. Things Change

If you or someone you know looked at Medicare Health Plans years ago, it is essential to be aware of the changes that have occurred since then. Health circumstances and Medicare Health Plans change, so reviewing your current situation with a licensed professional during the Annual Enrollment period (10/15-12/7) is highly recommended.

During this period, you can better understand the various Medicare Health Plans available and how they can best meet your needs. A licensed professional can help you navigate the different plans and coverage options and provide personalized recommendations based on your unique health situation.

By reviewing your options each year, you can ensure that your plan is best suited to your needs and that you receive the care and coverage you deserve. Don’t let outdated information or misconceptions prevent you from getting the necessary care. Contact a licensed professional today to learn more about your Medicare Health Plan options and start taking control of your healthcare decisions.

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