Medicare is a big deal for most Americans because healthcare is so costly. Per Fidelity Investments, a 65-year-old couple retiring today is estimated to face, on average, lifetime healthcare costs in retirement of $245,000. Any help that Medicare offers can make a big difference. Here are three ways to maximize your Medicare.
Don't enroll late
First off, be sure to enroll on time. Signing up late can result in more expensive premiums for the rest of your life. (Specifically, 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.)
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. If you fail to enroll during these seven months, you can always enroll during the "general enrollment period," which is from Jan. 1 through March 31 of each year. (If you're still working and have employer-provided healthcare coverage at age 65, or are serving as a volunteer abroad, you can delay enrolling in Medicare without penalty.)
Most people will automatically be enrolled if they're already receiving Social Security benefits during their enrollment period. That's a good safety net, but don't assume that you're taken care of. Make sure you're enrolled on time.
Choose the best plan for yourself
There isn't a one-size-fits-all Medicare plan. Instead, there's a bunch of options you can choose from, which can be distilled into two main choices: "original" Medicare and a Medicare Advantage plan. Let's review each.
Original Medicare, the form of the coverage familiar to most people, consists of Part A, Part B, and very often Part D. Part A covers inpatient hospital care (such as surgery), as well as care provided by skilled nursing facilities, hospice, and some home health-care providers. It also covers some lab test and doctor visits. Part B covers certain doctors' services, outpatient care, medical supplies, and preventive services. More specifically, it covers "medically necessary" services needed to diagnose or treat you, as well as preventive and early detection services such as certain vaccines and screenings. It also covers durable medical equipment (such as blood sugar monitors and home oxygen equipment), mental-healthcare, and limited prescription drugs. Part D offers prescription-drug coverage. There are also Medigap plans available to supplement coverage.
Medicare Advantage plans are newer and are sometimes referred to as Part C. They are plans offered by private organizations (such as health insurance companies) that are regulated by the federal government. A Medicare Advantage plan must offer at least as much coverage as Medicare (i.e., Part A and Part B benefits, respectively covering hospital and medical services), but it will often sport more than that, such as vision care, dental care, and/or prescription drug coverage, in order to attract customers. The extras it offers can be in the form of lower copayments for services, or broader coverage. These plans are sometimes great choices, as they may cost less and provide more coverage.
When it's time for you to choose coverage, read up on all these options available to you where you live. (Different Medicare Advantage plans, for example, are offered in different regions by different insurance companies.) Don't just compare premiums, either, because Medicare Advantage plans may offer different co-payments, deductibles, and so on. Compare total expected out-of-pocket costs. Another key consideration is travel, because Medicare Advantage plans are typically rooted in your local area. If you plan to travel a lot, original Medicare plans may be preferable as they're honored by providers nationwide.
Once you decide, know that you can change your mind and choose a different plan next year. In fact, it's a good idea to review all your options and their costs each year.
Use your Medicare plan wisely
Finally, a key way to maximize your Medicare is to make the most of what it offers. It entitles you to a free wellness visit with your doctor once a year, so be sure to schedule that. Many important screenings are also free for enrollees. These include mammograms and Pap tests, along with screenings for heart disease, colorectal cancer, prostate cancer, depression, glaucoma, hepatitis C, alcohol misuse, HIV, STDs, diabetes, and osteoporosis. Take advantage of all the preventive care you can, as it can keep you living longer and paying less for healthcare, too.
Below are a bunch of other Medicare benefits that you may not know about but might want to. Most are provided free of charge or have the patient paying 20% of the Medicare-approved cost (with a deductible applying):
- Abdominal aortic aneurysm screening: If you're deemed to be at risk and your doctor orders this screening.
- Ambulance services: These are covered in many cases when deemed necessary.
- Artificial limbs and eyes: These are covered when ordered by a doctor.
- Breast prostheses: Both external breast prostheses (including a post-surgical bra) and surgically implanted breast prostheses are covered after a mastectomy.
- Chiropractic services: If manipulation of the spine by a chiropractor or other qualified provider is deemed medically necessary to correct a subluxation, it's covered.
- Continuous Positive Airway Pressure (CPAP) therapy: If you're diagnosed with obstructive sleep apnea, Medicare will cover some of the costs of a CPAP machine and its supplies.
- Durable medical equipment (DME): These include blood sugar monitors and diabetic testing strips, suction pumps, walkers, wheelchairs, crutches, home oxygen equipment, commode chairs, nebulizers, infusion pumps, and hospital beds, among other items.
- Hepatitis B shots: If you're at high or medium risk of hepatitis B, shots are covered.
- Home health services: These include intermittent skilled nursing care, physical therapy, speech-language therapy, and occupational therapy.
- Hospice care: If you're deemed to have a life expectancy of no more than six months, you can qualify for free hospice care.
- Laboratory tests: Medically necessary clinical diagnostic laboratory tests ordered by your doctor or practitioner are covered, usually free of charge.
- Mental healthcare: Both inpatient and outpatient mental healthcare services are covered, to some degree.
- Obesity screening and counseling: This is available free for those who qualify by having a body mass index (BMI) of 30 or more.
- Physical therapy/occupational therapy/speech-language pathology services: These are covered, with yearly limits applying to services from most outpatient providers.
- Second opinions: If you are having non-emergency surgery, Medicare will sometimes cover the cost of getting a second opinion from a different doctor – and, on occasion, even a third opinion if the first two differ.
- Smoking cessation counseling: This is covered both for those who have and have not yet been diagnosed with a tobacco-related illness.
- Telehealth: This is where patients consult and interact with healthcare providers remotely and electronically, and it's a growing practice. Medicare covers some telehealth services when the patient is at a health-service facility.
- Transplants: Medicare covers doctor services for certain organ transplants.
If you sign up for Medicare on time, choose the plan(s) that suit you best, and then make the most of the coverage you have, you'll be doing a great job of maximizing your Medicare.
Longtime Fool specialist Selena Maranjian, whom you can follow on Twitter, owns no shares of any company mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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