Costs depend on Medicare coverage.
Health care is important at every stage of life.
Paying for health care can cause stress at any stage in life.
As you age, the anxiety over health care may increase.
According to a recent CNBC article titled “Here’s what you should know about Medicare costs if you’re nearing age 65,” it is important to understand Medicare.
This estimate excludes the care not covered under the basic Medicare plan such as vision, dental, over the counter medications, and long-term care costs.
So, from where do these estimated numbers come?
Is Medicare not free?
The answer is not a simple one.
Medicare premiums are free for Medicare Part A if you have a 10 year work history.
But what, there is more.
You do not escape the deductibles.
The deductible for Medicare Part A is $1.364 per benefit period with caps on the benefits.
Also, Medicare Part A is not all-encompassing.
It includes hospital stays, some home health benefits, skilled nursing, and hospice care.
For more coverage, you will need to purchase additional plans.
What are these options?
The first is Medicare Part B.
This covers medical supplies and outpatient care.
The standard monthly premium for 2019 is $135.50.
But what, there is more.
Those who earn more will pay more.
The deductible for Part B is $185.
After the deductible, you pay 20 percent of covered services.
For prescription drug coverage, you will need to sign up for the Part D plan as well.
Those parts of Medicare don’t cover prescriptions, so a Part D drug plan is needed or you can purchase an Advantage Plan.
The Advantage Plan is also known as a Part C plan.
Should you choose this route, your Part A and Part B plan will be delivered by the same insurance company.
How much does a Part D plan cost?
In 2019, the cost is $32.50 per month and the deductible is $415.
Again, those who earn more will pay more.
How do you sign up for Medicare?
If you take Social Security before age 65, you will be enrolled automatically.
One or two months before you turn 65, you will receive your card in the mail.
The cost of your Part B premium will be automatically taken from your Social Security.
If you have not yet taken Social Security, you will need to enroll yourself in Medicare.
You can enroll within a window of time that is opens three months before your 65th birthday to three months after your birthday.
The exception would be if you are still working at age 65.
If this is the case, you can enroll later in Medicare without a penalty.
Unless you have medical coverage from your employment, Part B is required.
Failing to enroll will give you a 10 percent penalty for each year you are not enrolled.
There is also a penalty for not enrolling in Part D when you are first eligible, unless you are working with insurance from your employer.
How much is this penalty?
The penalty for Part D is 1 percent for every month you should have been signed up.
Some couples choose to supplement their benefits with a Medigap plan.
You cannot have both a Medigap plan and an Advantage Plan.
Instead, you should choose the best option for you.
One item to note is that dental and vision coverage may be limited on an Advantage Plan.
There is a lot to consider when signing up for Medicare.
Researching and understanding your options and obligations will help you to avoid penalties and find the plan to fit your needs.
Reference: CNBC (August 29, 2019) “Here’s what you should know about Medicare costs if you’re nearing age 65”