3 Tips To Make The Most Out Of Your Medicare Coverage Plans

Updated on December 3, 2021

Aside from a retirement plan, getting the best health insurance plan in your senior years is one of the most important priorities for most Americans. However, people think that just enrolling in Medicare, a federal health insurance program, is enough to ensure that they have the best coverage plans. This is partly true as Medicare is used to cover basic health care needs. In addition, it pays around 80% of hospital bills and up to 100% of preventive care costs. 

But what most people don’t know is that there are many different Medicare coverage plans, and each plan has its pros and cons. So, maximizing the benefit of the coverage you choose will greatly depend on how you understand and use it.

This article lists three things you can do to maximize your Medicare coverage:

1. Know The Different Parts Of Medicare Coverage

It’s important to know that Medicare has different parts, and each has its coverage. The following are the different parts of Medicare:

  • Original Medicare Part A And Part B

Part A

Part A pays for inpatient hospital stays. It also pays for hospice care costs and home health costs. In addition, it also covers skilled nursing facility care if the patient needs rehabilitation.

Part B

Part B covers most outpatient services, which include doctors’ fees. It also covers some home health care costs and durable medical equipment.

  • Part C Or Medicare Advantage

It’s an alternative health insurance plan that covers all or most traditional Medicare Parts A, B, and D. These plans are offered by private insurance companies that contract with Medicare. Why choose Part C? Because Part C also covers some services that Original Medicare doesn’t, such as dental, vision, and hearing-related services.

  • Part D

Part D is the prescription drug coverage, which helps pay for prescription medications. Part D is only available through private insurance companies as the government doesn’t offer it.

Knowing the different parts of Medicare will help you determine if you have all the necessary plans. 

2. Enroll When You First Become Eligible

Enrolling with Medicare isn’t mandatory. However, late enrollment might lead you to a penalty. So, to avoid these penalties and enjoy your Medicare coverage plan as soon as possible, it’s advisable to apply for them when you first become eligible. The following are the criterion and penalties of each Medicare part.

Part A And B

If you meet the criteria below, you’re qualified for a premium-free Medicare Part A and are automatically enrolled when you turn 65.

  • You or your spouse had government work that pays for Medicare.
  • You’re receiving monthly Social Security benefits.
  • You’re eligible for Social Security disability benefits or Railroad Retirement Benefits (if you worked for a railroad).

You need to enroll for Medicare Part A and B and pay the monthly premium for those who don’t meet the criteria above. Late enrollment penalties apply if people don’t enroll when they first become eligible. Monthly premiums may go up by 10%. 

If the non-enrollment period lasts up to 2 years for Part A, the late enrollee will have to pay a higher premium percentage for four years or twice the year they should have been enrolled in. 

The longer you go without Part B coverage when you first became eligible, the higher the penalty you’ll have to pay on top of your Part B premium. Moreover, late Medicare Part B enrollees will have to pay the penalty for as long as they have Part B.

Part C Or Medicare Advantage 

Who can enroll in a Medicare Advantage plan? 

  • You must have Original Medicare (Parts A and B) to join a Medicare Advantage plan. 

Medicare Advantage doesn’t have a late enrollment penalty as it’s only an alternative to the original Medicare plans, which you still need to enroll in to acquire Medicare Advantage. 

Part D 

Who is eligible for Part D? 

  • If you’re already 65 years old and getting Medicare Parts A and B, then you’re already eligible to get Medicare Part D.
  • You’re getting Social Security or Railroad Retirement benefits for at least 2 years
  • You’re below 65 years old and have an end-stage renal disease (ESRD), then you’re qualified to enroll for Part D.

The same with Part B penalties, not enrolling in a Part D plan when you first became eligible may require you to pay a late enrollment fee that is permanently added on top of your Part D premium. You can only be exempted on the Part D penalty when you opt into Part D for having a creditable prescription drug coverage from an employer or union.

3. Understand Your Medicare Coverage Plans

Reading your Medicare coverage plan is essential. This way, you’ll know what’s covered, all the cost-sharing requirements, and what the maximum out-of-pocket costs are.

In case you purchase Medicare Advantage, knowing who will be your primary insurance carrier is also important. Primary insurance carriers are the ones responsible for paying claims first before your secondary carrier. Whatever is left by the primary insurance is what your secondary insurance will pay most of the time. 

Sometimes when the Original Medicare is primary, the maximum allowable amount for a service is lower than if the Medicare Advantage is primary. So, since secondary insurance to Original Medicare only pays whatever is leftover by the primary, it may or may not pay depending on the plan coverage. That’s why understanding your coverage plans is important, as it’ll enable you to make better decisions on choosing the right coverage to opt for and get the most out of your Medicare coverage plans.

Final Words

Getting Medicare coverage plans can be confusing at first, as there’s a lot of information to process. However, it gets easier as you go along and get to understand the different plans. Follow the tips above, and continue reading on coverage policies once you enroll to get the most out of Medicare coverage.

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