10 Things to Know About Medicare
1. Medicare isn't just for seniors
First and foremost, Medicare isn't designed solely for seniors. The disabled, as well as patients with end-stage renal disease (ESRD), qualify for Medicare coverage.
2. Seniors are enrolling at an incredible pace
That said, make no mistake about it -- this program is primarily here for our nation's growing population of seniors. With roughly 48 million current beneficiaries, the program is expected to grow to an estimated 79 million beneficiaries by 2030. With every day that passes, roughly 10,000 seniors becomes eligible for Medicare.
3. How much Medicare pays
Part A and Part B, which cover basic medical services, will pay 80% of your eligible medical expenses after you've paid your deductible. This means you're responsible for paying the remaining 20% -- and it should be noted that there is no annual out-of-pocket limit on expenses when it comes to Medicare. Also be aware that some services will cost you extra, while others might not be covered at all. You can check Medicare.gov or visit www.rjclarity.com to find out whether a particular service is covered.
4. Part A may require a premium
Part A, the hospital insurance portion of Medicare, rarely requires consumers to pay a premium. However, beneficiaries who don't have enough work credits over their lifetime may have to pay.
In order to enjoy Part A benefits without paying a premium, beneficiaries must have at least 40 work credits (the same number required to receive Social Security retirement benefits). Workers can earn a maximum of four credits per year, with one credit in 2017 equating to $1,260 in earned income. In simpler terms, if you make well beyond $5,000 per year for 10 consecutive years, then you'll qualify for free Part A when you become eligible for Medicare. Beneficiaries with 30 to 39 work credits pay $227 per month for Part A coverage, while those with less than 30 lifetime work credits pay the maximum $413 per month for Part A in 2017.
5. If you buy this, you may have to buy that
Medicare has some funny intricacies you'll need to be aware of, and choosing what you buy and what you don't buy is one of those quirks. For example, you can enroll in Part B for medical insurance and not enroll in Part A for hospital insurance. In most cases however, if you enroll in Part A for hospital insurance, you must enroll in Part B for medical insurance. Yet to get Part D you only have to be enrolled in Part A or Part B.
6. The wealthy will pay more
If you make a lot of money, you're liable to pay more for Medicare. To be clear, while Part A has no premium for the vast majority of people, Part B does come with an attached premium -- and if you make too much in annual income, you'll pay an additional surcharge.
For 2017, the standard Part B premium for individuals with incomes below $85,000, and joint-filers with incomes below $170,000, is $134.00. However, for single filers earning between $85,000 and $107,000, the premium jumps to $187.50 per month; those earning between $107,000 and $160,000 pay $267.90 per month; and those earning $160,000 to $214,000 pay a premium of $348.30 per month; and any income above $214,000 would increase the amount to $428.60 per month.
7. Wait on Part D and it'll cost you -- forever
If you're thinking about cutting costs and holding off on purchasing Part D coverage, keep in mind that this could have some lifelong consequences. For every month you delay enrollment, you'll incur a penalty when you eventually purchase Part D -- and you'll pay that penalty each month for the rest of your life. Medicare calculates the penalty by multiplying 1% of the "national base beneficiary premium" ($35.63 in 2017) times 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 your monthly Part D premium.
8. Skilled-nursing facility stays can be costly
Should you need to stay in a skilled-nursing facility following a qualified inpatient hospital stay of three or more days, you'll want to be aware of just how costly it could be if you need extended skilled-nursing care.
Assuming you qualify for skilled-nursing facility care in the first place, the first 20 days are covered by Medicare Part A at no cost to you. Each additional day up until the 100th day (days 21-100) requires a $161 coinsurance charge. Beyond that, all costs fall back onto the patient.
Additionally, should you refuse skilled-nursing facility care or therapy, you could lose your skilled-nursing facility coverage.
9. Medicare doesn't cover all services
It's important to note that while Medicare is designed to be there for seniors during their golden years, it can't do everything. In fact, Medicare does not cover preventive vision, dental, or hearing services.
10. Options exist beyond Medicare
Original Medicare is, in a sense, a one-size-fits-all package. There is no competition. Consumers simply choose whether to enroll in Part A and Part B or not. However, an alternative option does exist: Medicare Part C, or Medicare Advantage.
Medicare Advantage plans are run by private insurers, which means the consumer has more choices available to find the plan that best suits their needs. Medicare Advantage plans also roll Part A, Part B, and typically Part D into one plan, often with options for adding vision, dental, and/or hearing coverage. Furthermore, Medicare Advantage plans have annual out-of-pocket limits on Part A and Part B expenses of $6,700 as of 2017.
There can be disadvantages with these plans, too. Doctor networks tend to be smaller and more prone to change with Medicare Advantage plans, and out-of-pocket costs can sometimes be higher for certain services.