One of the most common questions is, “Is Medicare free?”, and one of the many misconceptions is that after paying into Medicare through payroll withholdings at work for many years, some people approach their eligibility age of 65 with a misconception that their coverage will be free.
In this article, we’ll walk you through the facts about Medicare that can help you make the most of your benefits and explain your shared costs in Medicare.
Sign Up at 65
If you’re enrolled in Social Security before turning age 65, then you will be automatically enrolled in Medicare. If you’re not receiving Social Security by then, however, and you don’t sign up for Medicare at age 65, you could end up paying more for your Medicare benefits than everyone else. Part B premiums even increase by 10% for each full 12-month period that you could have been enrolled but failed to sign up.
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Know the different parts
Medicare is a health insurance program with several options. Traditional Medicare, known as Part A and Part B, offers basic coverage for major medical costs. Part C and D are private health plans.
Medicare beneficiaries share costs with the federal government and health plans for their healthcare coverage. Here’s a quick look at the shared costs incorporated into each part:
- Part A: Pays for hospitalization costs. Your Part A premium is already covered (if you worked 40 quarters or you’re disabled). QMB then covers the 20% co-insurance that Medicare does not pay.
- Part B: Pays for physician services, lab and x-ray services, durable medical equipment, and outpatient and other services. QMB covers nearly all of your Part B costs.
- Part C: Medicare Advantage Plan (like an HMO or PPO) offered by private companies approved by Medicare. In many areas, you can join a QMB approved plan.
- Part D: Assists with the cost of prescription drugs. If your income and assets meet the tests above, you qualify for the Medicare Part D “Extra Help” program. It covers all or part of your Part D premiums, deductibles, and co-pays at the pharmacy. Additionally, it offers coverage through the doughnut hole coverage gap.
To Help With Your Costs
For many individuals, paying for prescription drugs can be a major burden. If this is the case for you, consider researching a stand-alone prescription drug plan.
This type of plan picks up where your healthcare coverage leaves off, helping to cover some of the costs associated with your prescription med copays.