How Does Medicare Work?


Are you approaching age 65? Are you wondering about Medicare plans and how they can benefit you?

You may know that Medicare is low-cost federal health insurance for those over age 65, younger people with certain disabilities, and individuals with end-stage renal disease. What you may not be aware of is how you can start using Medicare and make it work for your family.

How does Medicare work, and what do you need to know?

Let’s take a look.

What is Medicare?

Medicare was created in 1966 as national health insurance available primarily for the nation’s older population. Besides Social Security, it is the second-largest social insurance program in the nation.

Parts A and B are the main parts of Medicare, but they don’t cover all costs. You can also seek to sign up for a Medicare Advantage plan, which offers additional benefits that include dental and vision costs. Advantage plans are created by private companies that collaborate with Medicare.

Medicare is expanding continually in terms of what it can offer beneficiaries. Many individuals learn to sell Medicare and develop a lucrative career. In any event, it pays to know what options are available to you as you approach the age of eligibility.

How Do I Sign Up For Medicare?

Some people get signed up for Medicare automatically. When you’re eligible for retirement benefits through Social Security, this will also serve as your application for Medicare. And you’ll automatically get Part A coverage once you’re enrolled.

In addition, you’ll be signed up for Part B, which you pay a premium for. You can decide whether or not you want to keep it.

If you aren’t automatically signed up, you can enroll three months before your sixty-fifth birthday. If you miss the window between three months before and three months after your birthday, you’ll need to wait for the next open enrollment period.

What Are The Main Parts of Medicare?

Medicare Part A is free, and it covers hospital stays, care in skilled nursing facilities, and hospice care.

Medicare Part B covers things like preventative care, clinical research, and ambulance services. It will also help you pay for doctor’s visits and durable medical equipment.

As of now, the average premium for Medicare Part B is $148.50. However, you could be paying more if your income is higher. There is also a deductible of $203 for Part B as of 2021.

What is Medicare Advantage?

Medicare Advantage plans must follow the rules of Medicare, but they provide additional coverage. Most Advantage Plans cover prescription drug coverage (Part D.) If you or your spouse require a lot of medication, signing up for an Advantage plan could save you a good deal of money in the long run.

Some Medicare Advantage plans offer out-of-network services. Depending on the Advantage plan you choose, you could be getting coverage for glasses or dental visits. Some companies even offer perks like gym memberships, transportation to doctor visits, and meal delivery.

The actual cost of your Medicare Advantage Plan will depend upon the plan itself as well as where you live. Many come with their own monthly premium and an annual deductible that is in addition to those required by Part B.

Premiums, deductibles, and the number of times you need services will all factor into the total cost of your Advantage plan. 

Advantage plans may require that you get a referral before you see a specialist. However, it can result in lower prices than original Medicare provided that you do your research and choose the right plan for your needs.

What Are Medigap Plans?

Medigap plans are different than original Medicare. They are designed to fill the “gaps” in original Medicare plans.

Medigap plans cannot be used simultaneously with Medicare Advantage plans. This means that, if you want additional coverage, you’re going to have to do some homework. Decide what health coverage options are the most important to you, and figure out which additional coverage will save you the most money.

A Medigap plan can help you pay for things like copayments, coinsurance, and deductibles. If you plan to travel a lot in retirement, some Medigap plans may cover your medical fees while you’re overseas.

It’s important to enroll in Medigap plans when you first enroll in Medicare. With Medicare Advantage options, however, there will be two open enrollment times every year. 

The cost of Medigap will vary from plan to plan and from person to person. For example, depending upon the company, you may get discounts for being a non-smoker or for being married. Your location, age, and rate lock will also play a role.

How Do I Choose The Right Medicare Plan?

Choosing the right Medicare plan can seem overwhelming initially. You may need to sit down with a professional and discuss your options thoroughly before making a final decision.

It’s important to consider, for example, how often you see your primary physician vs. out-of-network doctors. You’ll also want to think about your prescription drug usage and travel frequency. If you wear glasses or have frequent dental problems, it may be important for you to choose a Medicare Advantage plan in order to be cost-effective. 

You may want to create a spreadsheet that can help you keep track of the pros and cons of each option. It also helps to total your anticipated monthly and annual costs as they will relate to your income. Strong records can give you the confidence that you’re making a good decision.

How Does Medicare Work?

How does Medicare work? Essentially, you’ll be choosing a plan that will cover your health needs and lessen the burden on your family. With the right research, you’ll be on your way toward effective care in no time.

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