My parents love to tell the story of how the entire bill to bring me into the world came to just over $300, a figure that included two nights in the hospital. Please note that that $300 was not their share of the bill after insurance paid. It was the entire bill. Back then, insurance was for medical emergencies. Today, I pay more than that every month just for my health insurance premium, even if I don’t see a doctor. It’s no wonder so many people are looking for ways to save on healthcare costs. In this article, we offer tips to help maximize your Medicare spending to get the most bang for your buck.
1. Enroll on Time
Probably the biggest impact you can have on your Medicare spending is enrolling on time, since this ensures you won’t pay late penalties for the entire time you have Medicare. If you’re collecting Social Security when you turn 65, you only need to worry about signing up for a prescription drug plan. However, if you won’t be collecting Social Security by the time you turn 65, you need to either sign up during your Initial Enrollment Period (IEP) or qualify for a Special Enrollment Period (SEP).
Your IEP begins three months before the month of your 65th birthday and lasts for three months after your birth month. That means you have seven full months to enroll in Original Medicare (Parts A and B) without incurring late penalties.
If you have creditable coverage (i.e. equal to or better then Medicare) through an employer, spouse, or union when you turn 65, you may qualify for an SEP. Check with your plan representative to ensure your coverage continues once you qualify for Medicare.
What happens if you enroll late?
If you miss IEP and don’t qualify for an SEP, you may pay late penalties, which vary according to which Medicare part it is and how late you are.
Medicare Part A
If you go a full 12 months without enrolling AND don’t qualify for premium-free Part A, you may pay a 10 percent late penalty for twice the number of years you could have had Part A but did not.
Medicare Part B
If you go a full 12 months without enrolling, you may pay a 10 percent penalty for every year you could have enrolled but did not: 12 months = 10 percent, 24 months = 20 percent, etc. You pay this penalty for the entire time you have Medicare.
Medicare Part D
If you go 63 days without creditable drug coverage, you may pay a late penalty for the entire time you have prescription drug coverage through Medicare. The amount changes every year, depending on the national base beneficiary premium, which will be $33.19 in 2019. The penalty is 1 percent of the NBBP multiplied by the number of months you went without coverage, rounded up to the nearest dime. The calculation looks like this:
Please note that late penalties are paid on top of your regular monthly premium.
2. Take Advantage of Preventive Screenings
Medicare Part B covers a variety of preventive services at zero cost to the beneficiary, as well as numerous screenings at the standard 80-20 split (you pay 20 percent of the Medicare-approved cost). You can find the full list of covered screenings here. Medicare offers these services when they’re proven to aid in the early diagnosis of a disease or condition.
When insurance companies cover services this way, you can be sure it’s because it saves them money. Luckily, what’s good for Medicare’s wallet is good for yours, too. Even better, it’s good for your health, since early diagnosis and treatment increase your odds of success.
3. Compare Your Medicare Options Carefully
One of the biggest choices you face is whether to stick with Original Medicare plus a Medigap plan or to sign up for a Medicare Advantage (MA) plan instead. There are pros and cons to both choices. We compare your options in our Medigap vs. Medicare Advantage post. Much boils down to how healthy you are, the level of plan choice in your area, and whether you travel.
In addition to the Original Medicare vs. Medicare Advantage comparison, you need to review your Part D options carefully. Look beyond the monthly premium to whether the formulary includes your prescriptions and what your co-pays are.
4. Take Advantage of Prescription Plan Discounts
Many Medicare Prescription Drug plans offer discounts for ordering in bulk, i.e. 90-day supplies of qualifying medications. Other cost incentives may include discounts for using a mail order pharmacy, tiered pricing for generic prescriptions, and preferred pharmacy networks. Review these discounts carefully when selecting your Part D plan.
5. Use Your Network
If you have a Medicare Advantage plan, stick with providers in your network to ensure your plan covers the costs of services. Networks go beyond primary care physicians to include clinics, labs, hospitals, long- and short-term care facilities…pretty much any person or place that provides healthcare. This includes the members of a surgical team, as well, so if you have any procedures scheduled, talk to your plan provider to determine coverage.
6. Ask an Expert
Comparing your Medicare options can be confusing, especially if you’re trying to choose between Original Medicare and an MA plan. The licensed agents at Medicare Solutions not only have the expertise to answer your questions, they also work with multiple private insurance companies. This gives them the flexibility they need to help you find a plan that works for your unique needs. To get started, just call us toll-free at 855-350-8101.
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