When you begin planning your retirement, one of the most important things to consider is your future healthcare spending. Many people mistakenly believe that Medicare is free, and they fail to anticipate just how much they need to set aside for Medicare premiums, copays, and deductibles.
It’s a difficult thing to plan for because most of us are unfamiliar with how Medicare works. After all, we usually have employer group coverage during our working years and so we have no knowledge of America’s national health insurance program for seniors.
Each year there are hundreds of people new to Medicare who are surprised to learn that Medicare Part B has a monthly premium of $135.50 (in 2019) for most people. Some people pay substantially more than that due to higher incomes. Part D has premiums that you’ll pay as well.
Lastly, Medicare also has cost-sharing that you’ll pay as you use healthcare services. Let’s review the types of expenses that you can expect to pay so that you can be sure to have a retirement nest egg that accounts for your future healthcare spending.
Medicare Deductibles for 2019
While we never plan for hospital stays, the reality is that when we age, the chances of having a hospital stay increase. Once you are on Medicare, Part A is what provides your hospital coverage. Spending just one night in the hospital means you will incur the $1364 Part A deductible. This deductible will pay for your initial 60 days in the hospital.
Part B provides your outpatient medical benefits which you will use more often. The deductible for Part B in 2019 will be $185. Fortunately, you pay this only once per year. After you have satisfied that deductible, Medicare pays for about 80% of your expenses whenever you have outpatient visits or procedures.
Part D is a voluntary prescription drug program which you can enroll in to get help with the cost of your prescription medications. If you do enroll in Medicare Part D, you’ll choose a plan offered by a private insurance company in your state. Medicare sets the maximum deductible for Part D each year, and in 2019 that deductible will be $415. Insurance plans can charge a lower deductible than this if they choose to do so, but they cannot charge anything more than that.
Once you satisfy the plan’s deductible, then you will begin to enjoy the copay benefits of your plan which will greatly reduce the cost of your prescriptions.
Medicare Copays Coinsurance and Copays
While deductibles can be costly, you must also prepare for the fact that you will have out-of-pocket spending as you go along. If you have a long inpatient hospital stay, you will begin to incur daily hospital copays after your first 60 days in the hospital. These are costly, and they also increase after 90 days in the hospital. Fortunately, hospital stays this long are a rarity. Nonetheless, you’ll want coverage to help you pay for these in the event that you do have a lengthy stay.
On the outpatient medical side of things, Medicare only pays 80%, so you need to be prepared to pay the other 20% of medical services like doctor visits, lab testing, diagnostic imaging, outpatient surgery, physical therapy and even cancer treatments.
This 20% is called your coinsurance and there is no limit to how much you will pay in one year.
Due to these copays and coinsurance, many Medicare beneficiaries purchase comprehensive Medigap plans like Medigap Plan F to help them cover these expenses.
Also called Medicare supplements, these insurance policies pick up where Medicare leaves off. There are 10 standardized plans to choose from and all of them will help to cover the costs that Medicare does not cover for you.
These insurance policies do not, however, cover outpatient retail medications that you pick up at the pharmacy. So if you enroll in Medigap, you’ll also want to buy a Part D prescription drug plan that will help you with those costs. These plans reduce the amount that you pay for any medications on the plan’s formulary.
Part C Medicare Advantage Policies
Another way to cover the gaps is to consider a Medicare Advantage plan. These plans pay instead of Medicare and you will get your benefits from a private insurance company. Although these policies must cover all the same benefits as Part A and Part B, how you access the benefits and what you pay for your share are set by the plan.
When you sign up for a Part C Advantage plan, your agent can give you a Summary of Benefits that lists out the various services and what you can expect to pay for them when you are covered by the plan.
One thing to keep in mind is that Advantage plans typically operate HMO or PPO networks. Be sure to check your physicians to make sure that they are in the network before you enroll.
When a job keeps making people tired or stressed out, many feel the perfect solution to their problem is to change jobs, go on vacation or get another manager. But often, the real problem comes from poor nutrition than from a need to change the job scenery. Is it possible that a lot of your problems could be solved just by substituting a veggie snack for that midday candy bar? It may sound surprising, but a poor diet diminishes one’s quality of life. Therefore, it’s important to get the right nutrients for proper bodily function. Read more
Are you seeing signs that bed bugs are in your home? If so, you want to get rid of them quickly, but how? If you are like most homeowners, you have no idea how to remove bed bugs and you don’t even want to think about the pest in your home. For removal, your best bet is to hire a professional team of experts who have experience in removing bed bugs from the home using premium techniques and tools. The quicker you schedule an appointment, the faster the bed bugs will no longer be a problem! Read more
Often, the simplest parts of life can make the biggest impact on our well-being. Sleep is one of those simple, yet enormously important, aspects of life that plays a significant role in our mental, emotional, and physical health. Read more