"Medicare and Social Security have created the healthiest and most financially secure generation of senior citizens in American history."
-- Jim Walsh
It would be rather hard to feel financially secure if you had to provide all of your retirement income and pay for all of your healthcare expenses. After all, according to a recent Fidelity Investments report, the average 65-year-old couple will spend about $260,000 on healthcare alone in their retirement. Thus, even though they don't cover all retirement or healthcare costs, Medicare and Social Security go a long way toward helping millions of older Americans.
Indeed, Medicare's enrollees recently totaled about 58 million people -- roughly 18% of the U.S. population. It will probably play an important part in your future physical and even financial health. To get the maximum benefit for a low cost, it's smart to learn more about Medicare and how to get the most out of it.
Here are three ways to maximize your Medicare.
No. 1: Choose between original Medicare or a Medicare Advantage plan
Next, understand that there's no one-size-fits-all form of Medicare that serves every enrollee. Instead, the coverage is available in various forms and you need to choose the one that makes the most sense for you. In a nutshell, you must choose between "original" Medicare, featuring parts A and B, and Medicare Advantage plans, which are sometimes referred to as Part C. With original Medicare, Part A covers inpatient hospital stays, skilled-nursing facility stays, and hospice, while Part B covers outpatient services, such as preventative care, laboratory tests, ambulance services, medical equipment, and necessary doctor services.
Medicare Advantage plans, meanwhile, are administered by private insurers but are regulated by the U.S. government. Each must offer at least as much coverage as original Medicare (i.e., the benefits you'll find in Part A and Part B). Many go beyond that, though, offering broader coverage, such as vision care, dental care, and/or prescription drug coverage. (Those in original Medicare typically buy Part D for prescription drug coverage and often add supplemental MediGap coverage, too.) Roughly a third of Medicare enrollees are in Medicare Advantage plans.
So which Medicare plan is best for you? It depends on your needs and preferences. Original Medicare is accepted by the most doctors, and you can see them without referrals. So you can find and see a doctor anywhere in the U.S., which is especially handy if you're a traveling retiree. Medicare Advantage plans, often similar to HMOs, feature defined networks of doctors (though some of the networks are quite large) or steeper costs for seeing out-of-network physicians, and they're typically limited to your local region. (Some do, on a limited basis, cover healthcare outside the U.S., unlike original Medicare.)
While original Medicare will often have you footing 20% of many bills with no limit on how much you end up spending, your out-of-pocket costs in a Medicare Advantage plan are capped. (The average out-of-pocket cap was $5,223 in 2016, but many plans feature caps below $3,000, and the limit for 2017 is $6,700.) Once you hit the limit, the plan will pay all further costs. Better still, many plans charge the enrollee nothing in premiums. (How is that possible? Well, the Medicare program pays the insurance company offering it a set sum per enrollee and if the insurer thinks it can make a profit without charging its customers anything, it can do so.) The average monthly premium for Medicare Advantage plans was recently $33.
When deciding between original Medicare and Medicare Advantage, think about which doctors you see, what services you need, and what drugs you take -- and then compare coverage and costs for available plans. The Medicare Plan Finder at the Medicare website can help you compare plans and choose. Note the star ratings of your candidate plans and aim to choose only a four-star or five-star plan, as those are the highest-quality plans.
Know, too, that you can always change your mind and choose a different plan next year. In fact, it's smart to review all your options and their costs each year.
No. 2: Be sure to enroll on time
We're often encouraged to not be late doing various things, but being late generally doesn't result in a harsh penalty. That's the case with Medicare, though.
You're eligible for Medicare at age 65 and can sign up anytime within the three months leading up to your 65th birthday, during the month of your birthday, or within the three months that follow. That's your Initial Enrollment Period. Miss it and your part B premiums (which cover medical services, but not hospital services) can rise by 10% for each year that you were eligible for Medicare but didn't enroll.
If you fail to enroll during your Initial Enrollment Period, you can always enroll during the "general enrollment period," which is from January 1 through March 31 of each year -- though that coverage won't begin until July and the late penalty might apply.
There's a big loophole, though: If you're already receiving Social Security benefits when you turn 65, you'll likely be automatically be enrolled in Medicare. (Whew!) If you're in that category, it's smart to double-check that you've been enrolled.
Also, if you're still working, with employer-provided healthcare coverage, at age 65, or are serving as a volunteer abroad, you can delay enrolling in Medicare without penalty.
No. 3: Make the most of your plan's offerings
The last tip for maximizing your Medicare is simply to take advantage of its many offerings. For starters, Medicare offers lots of screenings and preventive care, generally at no extra cost to you. Getting screened and seeing your doctor regularly can help identify problems early, before they grow worse and more costly. That can keep you healthier and living longer and better, while also keeping your healthcare costs down.
The wide range of services that should cost you no extra dollars (though some require doctor's orders) include abdominal aortic aneurysm screening, alcohol misuse screening and counseling, bone density measurement, cardiovascular disease screenings, cervical and vaginal cancer screenings, colonoscopies and other colorectal cancer screenings, depression screenings, diabetes screenings, flu shots, hepatitis B shots and hepatitis C screenings, HIV screenings, some home health services, lung cancer screenings, mammograms, nutrition therapy services, obesity screenings and counseling, pneumonia vaccine, prostate cancer screenings, sexually transmitted infection screenings, and smoking and tobacco-use cessation counseling.
Some Medicare plans also offer telehealth services, which are well worth using. They allow you to consult with doctors and other healthcare professionals electronically, often through a Skype-like video connection. These consultations can cost less than an in-person visit to your doctor and can be more convenient, too, happening immediately or within hours. They can be particularly helpful if you have a health issue crop up while traveling. Telehealth isn't generally an option for all original Medicare enrollees at this point, but it's available to some. And some Medicare Advantage plans offer it, too.
Finally, make use of wellness benefits included in your Medicare coverage. For starters, you're entitled to one wellness visit annually, at no extra cost to you. That's when you can see your primary care doctor to review your health. Don't skip this, as it gives your doctor a chance to discuss ways to get you healthier instead of just ways to treat the illness or injury you walked in with. You may have access to other health benefits and perks, too, such as discounts on gym memberships or free fitness classes. Find out what your plan offers and make the most of those benefits. When you're shopping for a Medicare plan, review available wellness perks, too, to see which would serve you best.
You can maximize your Medicare by signing up on time, choosing the plan that best serves your needs, and taking advantage of available screenings, telehealth services, and wellness benefits. Doing these things can help you get and stay healthier -- and might save you a lot of money, too!