If you feel like you need an advanced degree in Medicare to understand how the program works, congratulations you are not alone. In an effort to make it simple, Medicare somehow became very complex. In this article, we will share some of the most important Medicare money matters.
Let’s start by understanding the difference between Social Security and Medicare. Both taxes show up on a paystub but each serve a very different purpose. Social Security covers retirement and disability. Medicare covers health care. At one time, they were thought about hand in hand because 65 was the golden age of retiring, collecting social security and being covered by Medicare health insurance. But for those born after 1937 (80 years or older) full social security benefits are paid later than age 65. If you elect to take it earlier expect to incur a reduction in your check. Unless you are disabled, Medicare typically remains at 65 years.
So here is the SCOOP on Medicare eligibility.
You can qualify for Part A (Hospital) coverage because of you or your spouse’s work history. If you don’t qualify you may purchase Part A, but be sitting down when you hear how much it will cost. For Part B (Physician) coverage you pay the premium. If you aren’t collecting social security you can expect to be billed and pay quarterly. If you have the premium automatically deducted from your check you will see a small discount. Beneficiaries living in Tampa may consider a “give-back” option offered by some health plan companies. These plans actually “give-back” most of the Part B premium and the savings results in a bigger social security check. For a couple, this can add up to over $2,500 per year.
Are you feeling healthy and don’t think medical or hospital coverage is needed right now?
Be careful, the decision to save a few dollars on health premiums now could leave you with penalties later. Both Part B and Part D (Pharmacy) coverage carry penalties for failure to enroll when you are first eligible. Often times a beneficiary is not taking medications when they turn 65 years of age and it is tempting to skip making a Part D premium payment. Years later the same beneficiary enrolls in a plan offer benefits beyond what original Medicare offers the person is charged a 1% per month penalty for their drug coverage. If you are unsure about your choices it is always best to schedule a review of your situation by calling us at 727-845-5297.
Unlike original Medicare, which does not have a limit on the amount you will have to pay during the year, Medicare health plans have what is fondly referred to as MOOP. This is the “maximum out of pocket” expense a beneficiary will have to incur during any given plan year. These amount may appear staggering (ranging from $3400 to $6700) but this is the maximum amount you will have to pay no matter how serious the situation.
Once enrolled in a Medicare health plan the prescription drug coverage offers a TrOOP which is the “true out of pocket” expense you incur before you reach the catastrophic level of coverage. This topic could be offered as an entire semester of courses. There are formularies, tiers, co-payments, a gap and donut holes.
If you want to understand more about your current plan we can schedule an in-home appointment or meet for a cup of coffee at 7634 Massachusetts Ave., in New Port Richey.
Call us today at 727-845-5297.