Health Care
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Medicare Basics
Medicaid For Women
In Retirement & References
Medicare was created in 1965 to cover medical insurance for Americans 65 and older. In 1972, Medicare coverage was extended to include individuals under the age of 65 with long-term disabilities and individuals with end-stage renal disease. Over the years, this program has also included benefits to include home health services, Medicare supplement insurance called Medigap, hospice services and more. It is important to understand how Medicare can help provide you what you need in your retirement.
You become eligible for Medicare at age 65. However, you’ll want to remember to sign up during your seven-month initial enrollment period that begins three months before the month you turn 65. If you’re still working when you’re 65 and get health insurance through your employer or your spouse’s employer, you’ll have the opportunity to enroll in Medicare when you leave your employer plan through a Special Enrollment Period.
Medicare Parts A, B and D, Medicare Advantage and “Medigap” supplemental insurance plans.
Part A covers hospital costs after you meet a deductible.
Part B is optional coverage for medical expenses and requires an annual premium.
And Part D is prescription drug coverage.
Medicare Advantage plans are all-in-one managed care plans that provide the services covered under Part A and Part B of Medicare and may also cover other services that are not covered under Parts A and B, including Part D prescription drug coverage.
Supplemental policies, referred to as Medigap policies, are offered by private insurance companies to supplement Medicare Parts A and B.
Extraordinary medical payments have negative impacts on families’ financial health and this is even truer for women.
Medicare premiums are will impact your retirement costs. Most people don’t pay a premium for Medicare Part A, which covers hospital visits. But you will pay monthly premiums for Part B (doctor services and outpatient care), Part D (prescription drugs), and supplemental coverage that may pick up the cost for deductibles, co-pays and medications. These could be taken straight out of your Social Security check.
The premium for Part B is tied to inflation. Most people paid $109 a month in 2015– and it isn’t going up at all in 2016. You might have to pay more if you don’t get Social Security because you receive a government pension, or if your annual income is more than $85,000.
The premiums for Part D and supplemental insurance are set by your provider and vary by plan and by where you live. You can expect these to take up a big chunk of your expenses and are big drivers of rising health care costs. Part D premiums were expected to go up an average of 12% last year, according to HealthView. (Source CNN Money, Dec. 2015)
When assessing the best insurance you always need to look at the cost of annual premiums and co-pays at different levels, compare costs, then factor in the number of visits and co-pay/co-insurance per visit that you anticipate for the next year. Determine if you may be better off paying a higher premium but not having to pay out-of-pocket at your office visits.
You’ll still have to pay for some expenses out of pocket. And only some Medicare plans cover things like long-term care, or dental and vision insurance. How much extra you’ll need really comes down to how healthy you are, how long you live and at what age you retire. Use a calculator to get an estimate that takes your personal information into account.