Medicare is a federally-funded program for seniors 65 and older. It helps seniors in their retirement years gain access to affordable healthcare without the stress. That being said, there are a lot of things you need to know about Medicare before you reach the age of 65 to make sure you’re equipped to take advantage of the program fully.
While heading into retirement already brings a range of new challenges, Medicare doesn’t have to be one of them. Learning when to enroll, how to enroll, and which programs in particular are best for you will go a long way in helping you feel confident in your golden years. Here are 5 important facts to learn about Medicare.
1. You’ll Need to Pay for Medicare
A lot of people make the mistake of thinking that this federal program is completely free. You pay Medicare taxes, after all, so should it be covered by those taxes you’ve paid most of your life? In reality, you’ll still need to pay a monthly premium.
Medicare Part A which covers your hospital services is actually free as long as you or your spouse has paid Medicare payroll taxes for ten years or more. However, Medicare Part B which is your coverage for doctor visits and other outpatient services comes with a monthly premium. This premium changes each year, as does the premium for Part D, or your prescription drug coverage.
2. There Is All-in-One Coverage
You don’t have to opt for “traditional” Medicare or Parts A, B, and D. There’s something known as Medicare Advantage which is also called Medicare Part C. This will have a monthly cost similar to Medicare Part B, but you can group your coverage.
While it will depend on your particular plan, Medicare Advantage is often more cost-effective and customizable. Learn more about Medicare Advantage to see if it’s right for you.
3. The More You Earn, the More You Pay
If you choose to be covered by “traditional” Medicare, you’ll need to be aware of the income threshold. If you’re single and your adjusted gross income is more than $85,000 or if you’re married and filing jointly with an income of $170,000, you meet this threshold.
High earners pay up to $428.60 per month for Medicare Part B, and the exact number you pay is based on your income level. This might impact whether you choose a Medicare Advantage plan or another type of coverage.
4. There Are Several Enrollment Periods
The most well-known enrollment period for Medicare begins 3 months before your 65th birthday and ends 3 months after, but this isn’t the only enrollment period. If you missed signing up for Medicare Part B during your first enrollment period and you aren’t working (or covered by a spouse who is working), you can always sign up during the general enrollment period between January and March.
However, you’ll need to pay a 10% penalty for life for every 12-month period you delay in enrolling. The only exception to this is if you are currently covered by an employer’s plan. In this case, your enrollment period lasts for 8 months after you lose your employer coverage.
5. Medicare Comes with Free Services
Finally, Medicare actually comes with a number of free services. These are all preventative services, and they’re important to take advantage of. You can get a free annual “wellness” visit to help create a personalized prevention plan for your needs.
You’ll also get a free cardiovascular screening every 5 years as well as yearly flu shots, mammograms, and other cancer screenings. Preventative care goes a long way to reducing overall costs.
Are You Ready for Medicare?
While many seniors are intimidated by Medicare, it doesn’t have to be that way. Now that you know the most important facts, you’re ready for a stress-free retirement. Medicare is an amazing program that makes healthcare simple for all.
Now is the time to ask yourself if you’re ready for Medicare? As you approach your own enrollment period, it’s time to make your preparations.