Retirement Guys: Medicare basicsWritten by Nolan Baker Mark Clair | | firstname.lastname@example.org
What is Medicare? At age 65, like it or not, it typically becomes part of your life. It was established in 1965 as Title XVIII of the Social Security Act and was meant to ensure health care for those of us who are getting older by paying some of the costs of designated health care services. Medicare becomes the primary source of health care for people older than 65 and most other health insurance plans become secondary. American citizens become eligible at age 65 and noncitizens can become eligible if they have lived in the U.S. continuously for five years. You can qualify for Medicare regardless of your health history or any preexisting conditions and it does not depend on how much money you have in the bank.
There are different parts of Medicare. Part A is primarily hospitalization and is available to everyone who has paid Medicare payroll tax for at least 10 years. Spouses are also eligible for Part A. Part B covers doctors’ services, X-rays and tests; there is a monthly premium cost that is charged and also an extra charge to those having income over $85,000 for single people and over $170,000 for married couples. Part D is Medicare’s prescription drug benefit and was part of the Medicare Modernization Act of 2003 and was launched in 2006. Everyone who is eligible for Medicare is eligible for Part D. There is a basic component of Part D and insurance companies are allowed to offer expanded coverage at a cost to the consumer.
There are monthly premiums for this part of Medicare that range from $15 to approximately $130. Since everyone has different medication needs, it can be a challenge to find a prescription drug plan that offers the medications needed at the right price. Since 2011, there has been an income test for Part D, which adjusts the monthly premium up for people over certain income limits. Part C plans, which are also called Medicare Advantage, are health plans offered by private insurers in an all-inclusive format and deliver all of the services under Parts A and B and usually Part D, along with additional coverage for some of the things Medicare does not cover.
It is important to know that Medicare does not cover all health care services. It does not even cover the services that it does cover in total, and therefore those on Medicare are responsible for certain out-of-pocket costs. Things that are not covered are routine dental care, vision care, hearing aids, cosmetic surgery and alternative medicine such as acupuncture. It does cover hospitalization, doctor visits, diagnostic tests, surgeries and outpatient treatment, but not until a deductible is met.
An important thing to be aware of is that Medicare does not really cover long-term care. It will pay for some care during the first 100 days, but after that you are on your own. Long-term care is care that goes on for an indefinite period in which care is needed on an ongoing basis. It is important to look at this area of planning to try to avoid a long-term care spend-down and the massive erosion of your life savings.
Since Medicare does not cover everything, most people look into what is called a “Medigap” or “Medicare Supplement” insurance policy. These policies are issued by private insurers to help cover the “gaps” in Medicare. Most states require that these policies be standardized and plans are designated A, B, C, D, F, G, K, L, M and N.
These are some of the basics of Medicare, but there is a ton more information to digest. To help you get down some of the basics, the free “Retirement Guys Baby Boomer’s Guide to Medicare Planning” is available upon request by visiting the website retirementguysnetwork.com.
For more information about The Retirement Guys, tune in every Saturday at 1 p.m. on 1370 WSPD or visit www.retirementguysradio.com. The Retirement Guys are not an affiliate of NEXT Financial Group. The office is at 1700 Woodlands Drive, Suite 100, Maumee.
Tags: 1965 as Title XVIII of the Social Security Act, Medicare, Medicare Modernization Act of 2003, Medigap” or “Medicare Supplement” insurance policy, Part A, Retirement Guys Baby Boomer’s Guide to Medicare Planning”