Reaching the age 65 will give you automatic Medicare eligibility. But as opposed to popular belief this plan doesn’t come for free, and you need to know its mechanics before actually signing up. It can be insanely expensive if you don’t.
Even if you’ve been on Medicare for a long time, re-evaluating your options yearly will make sure you still have the right plan. October 5 to December 7 is the yearly open enrollment period, during which you can change your plan if you think it’s necessary.
If you have a Medicare Part D drug plan or a Medicare Advantage plan, it becomes particularly important to go through your options yearly, considering that these two policies change features features from time to time, such as deductibles, copay amounts, covered drugs and the rest.
Medicare plans are split into the following categories:
Part A (Hospital Care, Skilled Nursing, Hospice and Some Home Health Care)
If you have a minimum Social Security work history of 10 years, you pay nothing for this, and your premium amoutn will be determined by your Social Security work credits.
Part B (Doctor Visits, Preventive Care, Outpatient Care And Hospitals, And Some Home Health Care)
In 2018, this is going to average $134 monthly for most beneficiaries with yearly incomes equal to or not exceeding $85,000 ($170,000 for couples), and as much as $428.60 for those who earn more than $214,000 ($428,000 for a couple) annually. If you’re like most people, you will probably need a Medigap plan on top of Parts A & B.
Part C – Medical Advantage Plan
There are companies in agreement with Medicare to provide Part A and Part B benefits, with some plans also offering coverage under Part D. Premiums differ according to plan and region, but the Medicare Advantage plan average in 2018 is $30, lower by 6% from the past year.
Part D – Prescripton Drugs
The average premium in 2018 is $33.50, lower than the $34.70 average in 2017.
The first big step Medicare beneficiaries need to take is choosing between traditional coverage (Parts A, B and D) or a Medical Advantage plan (Part C). Medical Advantage plans can have low or zero monthly premiums, but they often restrict members to certain doctors and hospitals. These two options have deductibles, copoays and coinsurance, which requires you to shoulder a part of the bill.
If you choose traditional Medicare, you can just add a Medicap policy, which is a supplemental policy that takes care of what isn’t covered by Medicare. There are 10 types of Medicap policies, each offered by a private company or group, and their costs differ significantly. You’d like to review each plan as thoroughly as possible in order to make the smartest choice.