K is for Knowing the Different Parts of Medicare and the Importance of Comparison Shopping for Medicare Plans

Knowing the different parts of Medicare and the importance of comparison shopping for Medicare Plans

Most seniors agree comparison shopping for Medicare plans can be more painful than going to the dentist. However, by not reviewing your Medicare plan and coverage annually, seniors may be putting themselves at financial risk. According to a survey commissioned by WellCareHealth Plans, Inc, approximately three in five (58%) seniors see reviewing their Medicare plan as a necessary undertaking; and one if five (20%) would describe the experience as awful. This survey also reveals that seniors do not always comparison shop or review their Medicare plan after it is put in place which could lead to inadequate coverage annually.

Yes, understanding Medicare is easier said than done but the more you familiarize yourself with Medicare, the more likely you will be able to take advantage of the benefits and make the right choices for you when you become eligible at 65. There is a 7-month initial enrollment period which begins three months before you turn 65, includes the month you turn 65, and ends three months after the month you turned 65 for both Plan A and Plan B.

Let’s Learn about the different parts of Medicare and how each covers specific services:

Medicare Part A – covers hospital insurance and inpatient hospital stays, care in a skilled nursing facility, hospice care, and some health care. You most likely will receive this benefit without a monthly premium due to all the payroll taxes you paid while you were employed. You will, however, pay a yearly deductible before Medicare covers any hospitalization costs. For 2018, the Part A deductible is $1,132.

Medicare Part B – Part B is optional, and you may want to opt out if you still have health insurance through an employer, your spouse, etc. Part B is your outpatient coverage, and it covers a portion of doctors’ services, outpatient care, medical equipment, outpatient procedures, rehabilitation therapy, lab tests, mental health services, ambulance services and preventive services.

The standard Part B monthly premium amount is $134 (or higher depending on your income). However, some people who get Social Security benefits may pay less than this amount ($130 on average).

Part B deductible & coinsurance – you pay $183 per year for your Part B deductible. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services, outpatient therapy, and durable medical equipment.

*Should you choose to delay enrollment and opt out of Part B when you initially enroll in Medicare and later decide you want the coverage, you may have to pay a higher premium.

Medicare Part C — Your Private Insurance Option, also known as Medicare Advantage or MedicareHealth plans. Part C plans are offered through private insurance companies and approved by Medicare. They are approved private health insurance plans for individuals enrolled in Part A and Part B. When you join a Medicare Advantage plan; you must continue to pay your Part B premium.

Medicare Part C – may potentially save you money because out-of-pocket costs in these plans can be lower than Original Medicare, Part A, and Part B. Pricing will vary by the plan provider, and each Plan has its advantages and disadvantages. Do your homework and compare which plan is right for you.

Medicare Part D – adds prescription drug coverage. These plans are offered by authorized Medicare-approved insurance and private companies that provide prescription drug coverage.

Now that you know the basic Parts of Medicare go to Medicare.gov and dive into learning more about different Parts and plans that will fit your needs after age 65. If you want help check your local State Health Insurance Assistance Program at no cost to you. It’s important to know what healthcare costs your Medicare plan will cover as you spent years saving for retirement and don’t want health care cost to deplete your nest egg.

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About Ann Zuraw

Ann Zuraw, the voice behind "Chicks, Chat and Change", is a Certified Financial Planner (CFP®), Chartered Financial Analyst (CFA®), and Certified Divorce Financial Analyst (CDFA™). If you have comments on this post contact Ann Zuraw

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