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Tips and tricks to lower your Medicare costs

13 Ways to Lower Your Medicare Costs

It should surprise no one that healthcare costs are high. And, while programs like Medicare help cover some of the cost, nothing covers everything. In this post, we describe 13 ways you can lower your Medicare costs.

1. Choose Providers Who Accept Assignment

When a provider agrees to charge the Medicare-approved amount for a service, Medicare calls that “accepting assignment.” The provider submits a claim for payment directly to Medicare and cannot charge more than the approved amount.

Providers who do not accept assignment can charge more than the Medicare-approved amount. For full details, see our post: Medicare Claim Reimbursement.

2. Enroll in Medicare On Time

One way that Medicare encourages timely enrollment is by charging penalties if you sign up late. Unfortunately, many people who qualify for Medicare don’t realize that they have to sign up for the program. Back when 65 was the default age for collecting Social Security, enrollment was automatic. Today, you’re only automatically enrolled if you began receiving Social Security or Railroad Retirement Board benefits at least four months before turning 65.

Penalties can be significant and many are paid for the rest of your life. See our post, What Is the Medicare Late Enrollment Penalty? for all the details.

3. Understand the ABCs and D of Medicare

Medicare is a complicated program. But understanding how it works and what’s covered goes a long way toward saving you money. Our Medicare 101 post has full details, but as a quick reminder:

  • Original Medicare includes Parts A and B
  • Part A covers inpatient hospital services
  • Part B covers outpatient medical services, such as doctor appointments and lab work
  • Medicare Part C is Medicare Advantage (MA)
  • Part D is Medicare’s prescription drug coverage

With a bit of time and research, it’s possible to become a Medicare expert.

Understanding Medicare helps lower your costs

4. Advocate for Yourself

Many of us tend to assume a service is covered simply because our doctor ordered it. Unfortunately, this isn’t necessarily true. One example that leaps to mind is hospital observation. This is such a pervasive problem that we wrote an entire article on how it works – and the repercussions.

If Medicare doesn’t cover a service, or only covers it under certain circumstances, you bear responsibility for the cost. The only way to know whether a service is covered by Medicare is to ask. And read that article on hospital observation. It will probably surprise you.

5. Ask Your Doctor about Costs

When you ask your doctor whether a service or procedure is covered, go ahead and ask how you can cut your medical expenses. Few people like to discuss finances, but your doctor is the best resource you have for saving money on healthcare. For example, your doctor can help you save money on prescriptions or what you pay specialists. But you won’t know until you ask.

6. Take Control of Your Health

It seems obvious, but the most effective way to save money on your healthcare is to reduce your need for healthcare. First, talk to your doctor about diet and exercise. Managing your weight, following a healthy diet, and remaining active go a long way toward total wellness.

In addition, take advantage of Medicare’s coverage for preventive screenings. This helps ensure that potential health issues are caught early, when treatment is easier (and cheaper).

7. Manage Chronic Conditions

The National Council on Aging tells us that around 80 percent of seniors have at least one chronic condition and over two-thirds have two or more.

The Centers for Medicare and Medicaid Services offers Connected Care to help beneficiaries manage chronic conditions. Use it to help manage medications, get 24/7 access to providers, personalized assistance, and more.

8. Take Advantage of Annual Enrollment

Medicare Annual Enrollment occurs every year from October 7 through December 15. We cannot urge you strongly enough to take advantage of this opportunity. There are nearly always changes to plans and coverage. Providers leave networks. Drug formularies add and remove prescriptions. Premiums and copays change. Annual Enrollment can save you a bundle. It can also cost you if you ignore it.

Example of a 5-tier drug formulary used by prescription drug plans

9. Find the Best Prescription Coverage for You

When choosing prescription drug coverage, review the formulary carefully. Not every plan covers the same prescriptions. In addition, plans place medications on different tiers. The best plan in world may be the wrong plan for you if it doesn’t cover your prescriptions. Also pay attention to the pharmacy network. Many plans offer additional savings for using one of their preferred pharmacies.

For more money-saving tips, read our post Save on Prescription Drugs.

10. Consider Enrolling in a Medigap Plan

Medicare Supplement Insurance, commonly referred to as Medigap, helps pay some of the out-of-pocket costs not covered by Original Medicare. With no annual limit to your costs under Original Medicare, savings can be significant.

For more information, please see our Guide to Medicare Supplement Insurance. We also offer a cost comparison between Medigap Plan F and Plan G.

11. Keep an Eye on Your Income

Medicare premiums vary based on your income. If you file as an individual and make more than $85,000 a year, or file jointly and make more than $170,000 a year, you pay higher premiums for both Part B and Part D. (For more details, see our post on appealing higher Medicare premiums.)

Talk to your financial planner about limiting withdrawals from your retirement accounts to keep your income under those thresholds while still meeting your annual withdrawal requirements. You may also want to consider investing in a Roth IRA instead of a traditional IRA, which offers multiple benefits.

12. Look for Help Paying Medicare Costs

There are state programs available to help pay your out-of-pocket Medicare costs. Each has its own requirements regarding income and resources. Our post Medicare State Assistance Programs has all the details, including links to each state’s Medicare page.

13. Work with a Medicare Insurance Broker

A Medicare insurance broker (like the licensed agents at Medicare Solutions) can help you understand your Medicare options, including which plans fit both your budget and your healthcare needs. You pay nothing for this service – not to us and not in the form of higher premiums. To get started, call us toll-free at 855-350-8101.

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