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Planning your retirement can be overwhelming. Saving money isn’t enough. Among others, one of the most important is healthcare, which can strain your finances if you don’t prepare accordingly.
Health expenses in your retirement can cost hundreds of thousands of dollars. The priority is to keep the cost as low as possible so you can use your savings for other important things. Medicare can help make that happen, but only with the right approach. If you’re clueless about how to do it, read on and learn from the tips we’ll share.
Learn About the Plans
Medicare is available in four different plans. Each plan has its respective eligibility requirements. Knowing what the plan covers can help you choose what is right for your retirement needs.
Medicare Part A
Also known as Hospital Insurance, it includes costs for in-patient hospital care, hospice care, home health care, and skilled nursing facility care. It’s premium-free for most members.
Medicare Part B
This coverage is also called Medical Insurance. The coverage of the plan includes costs for medical services from healthcare providers. It also covers outpatient services, including wellness and laboratory. The plan comes with a monthly premium. It also has deductibles and coinsurance.
Medicare Part C
Also called Medicare Advantage, it’s a plan from private companies that can be a great alternative to Original Medicare (Parts A and B). It can also include prescription drugs. Depending on the plan, it might also come with dental and vision coverage.
Medicare Part D
It’s also called Drug Coverage. The plan covers expenses for prescription drugs and vaccines. They are provided by private insurers that follow the Medicare rules.
Medicare Supplement Plans
To fill in the gaps of the original Medicare, you can also buy supplemental plans from private insurers. This plan is also known as Medigap as it fills the Medicare gap. You can choose from various plans, each designated with a letter from A to N. They do not include prescription drugs, so you might still need Part D.
An important thing to note about Medicare Plan D is that it works when you only have Parts A and B.
What Are Not Covered
It’s also good to know what Original Medicare does not cover so you can prepare for them. Among others, one of the most important is long-term care. If you ever need to stay in a nursing home or assisted living facility, the expenses are not covered by Medicare.
Other things not covered by Medicare are items and services provided outside the United States, dental services, cosmetic surgery, and medically unreasonable services.
Shopping for a supplemental plan can help fill in the gaps in Medicare. Nonetheless, each plan is very specific regarding what it can cover, so make sure to pick one compatible with the medical needs you anticipate.
Know the Deadlines
Time is of the essence, so make sure to know your dates. Enroll as early as possible. The first chance to sign-up is during the Initial Enrolment Period. It starts three months before your 65th birthday and three months after. After which, the coverage begins when the month starts.
Meanwhile, you can also sign-up during the General Enrolment Period. It happens every year from January 1 to March 31. If you enroll within this time, the coverage will start on the month after the enrollment.
Failure to sign-up on time can incur penalties. Nonetheless, there are instances when such penalties can be waived. There can be a Special Enrolment Period for a limited time.
Find the Right Provider
Some Medicare plans, such as Medigap, are from private insurers. Hence, you must evaluate the possibilities to enjoy the best value for your money. Don’t immediately decide after seeing a single offer. Shop around and compare your options.
Do you need help looking for the right plan? You can shop Medicare plans with Assurance.com. The website offers a comprehensive tool to help you pick the right plan within minutes.
Cost of Medicare
Financial considerations are critical when planning your retirement. Hence, you must be familiar with the costs of various Medicare plans.
Part A is premium-free for most eligible members. This is because you or your spouse have already paid it when you were working. Nonetheless, if you don’t qualify for a premium-free plan, you can purchase it, which can cost $278 or $506.
Meanwhile, Part B will cost $164 monthly. It can be higher depending on how much you’re earning.
Part C and Part D will have varying costs. The same is the case with Medicare supplement plans or Medigap. In most instances, Medigap can cost anywhere from $50 to $300 per month.
Conclusion
Photo by Vlad Sargu from Unsplash
Health is wealth, so it must be one of your priorities when you retire. It can be financially draining, making it vital to prepare. You can do this when you have the right Medicare coverage. Choose the right plan for your peace of mind!
