Discover five essential Medicare facts that your parents may not know. Help them navigate coverage, costs, and benefits to make informed decisions and avoid costly mistakes
Medicare is a federally run program that provides health insurance for millions of Americans, primarily those aged 65 and older. Unfortunately, it can be complicated and often misunderstood by many people.
If your parents are nearing Medicare eligibility or are already enrolled, they might not be aware of some important factors that can affect their coverage, costs, and benefits. Understanding these details can help them make informed decisions and avoid costly mistakes.
Here are five things your parents may not know about Medicare.
1. Medicare Doesn’t Cover Everything
One of the most common misconceptions about Medicare is that it covers all medical expenses. Although Medicare covers a wide variety of healthcare costs, there are still some gaps in coverage that can have negative financial implications for beneficiaries if they are unprepared.
Medicare Part A
Medicare Part A covers inpatient hospital stays and is usually premium-free for most people. However, it does not cover everything that happens during a hospital stay. For example, without other supplemental coverage, such as a Medigap plan, patients are responsible for the Part A deductible of $1,632 in 2024 for each benefit period.
Medicare Part B
Medicare Part B covers outpatient care and requires a monthly premium for most people. Additionally, Part B comes with a deductible and a 20% coinsurance for most services after someone has met the deductible.
Medicare also does not cover routine dental, vision, or hearing care or long-term custodial care, which is important for many older adults.
Many beneficiaries emphasize the importance of understanding what Medicare doesn’t cover to avoid unpleasant surprises. Your parents may also benefit from other tips from retirees, which are discussed here https://boomerbenefits.com/advice-retirees-wish-they-knew-sooner/.
2. Enrollment Deadlines Can Cost You
Medicare enrollment isn’t automatic for everyone, and missing deadlines can lead to late enrollment penalties or gaps in coverage. However, those who receive Social Security benefits for at least four months before their 65th birthday month will automatically be enrolled in Medicare Part A and Part B. On the other hand, if your parents are not yet receiving Social Security benefits, they will likely need to sign up for Medicare during their Initial Enrollment Period (IEP) to avoid late penalties. They could face late enrollment penalties if they miss their IEP and don’t have other qualifying coverage, such as large employer insurance.
3. Medigap vs. Medicare Advantage: Choosing Wisely
Once your parents have Original Medicare (Parts A and B), they have options for additional coverage. Many seniors are unaware of the differences between Medigap (Medicare Supplement Insurance) and Medicare Advantage (Part C) plans, which can significantly impact their healthcare experience and costs.
Medigap Plans
Medigap policies work alongside Original Medicare as secondary insurance and help pay for out-of-pocket costs such as deductibles, coinsurance, and copayments. Medigap plans offer more flexibility since beneficiaries can see any doctor in the U.S. who accepts Medicare insurance. However, Medigap policies do not include drug coverage, so your parents would need a separate Part D plan for prescription medications.
Medicare Advantage Plans
Medicare Advantage plans are an alternative to Original Medicare. Private insurance companies approved by Medicare offer these plans and can include additional benefits, such as dental, vision, hearing, and drug coverage. However, Medicare Advantage plans often have network restrictions, meaning your parents may need to see doctors within the plan’s network and may require referrals for specialists.
Choosing between Medigap and Medicare Advantage depends on medical needs, travel plans, and cost preferences. One person may prefer paying higher upfront premiums with Medigap for more predictable costs, while another may prefer lower premiums with a Medicare Advantage plan but potentially higher out-of-pocket costs.
4. Income Can Affect Medicare Premiums
Many people assume that Medicare premiums are the same for everyone, but this is not always true. Medicare Part B and Part D premiums are subject to Income-Related Monthly Adjustment Amounts (IRMAA), which means higher-income individuals pay more for their coverage. The Part B premium could rise to as much as $594.60 monthly in 2024, depending on their income bracket.
It’s important for your parents to be aware of this income threshold, especially if they may have retirement income from investments, pensions, or part-time work.
5. Preventive Services & Screenings Are Not Always Free
Medicare offers various preventive services to help seniors maintain their health, such as flu shots, annual wellness visits, and screenings for conditions like diabetes, cancer, and cardiovascular disease.
However, not everything is always covered. For example, Medicare will pay for a colonoscopy, but if a polyp is found and removed during the procedure, your parents could be responsible for some of the cost.
Encouraging your parents to take advantage of Medicare’s preventive services can help them stay healthier longer, but it’s helpful for them to understand what’s covered and what might lead to out-of-pocket costs.
Final Thoughts
Medicare can be a confusing system that requires a good understanding to maximize its benefits. By being aware of these five key areas, your parents can better navigate their healthcare options, avoid costly mistakes, and ensure they receive the care they need. Whether new to Medicare or enrolled for years, ongoing education helps manage their health and finances as best as possible.
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