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5 Things You Need To Know About Medicare Before You Need Medicare

Happy old couple looking at a cameraMedicare has been a Godsend for many Americans. There are now roughly 52.3 million Americans on Medicare; 43.5 million due to age and another 8.8 million because of disability. Medicare beneficiaries averaged $11,901 in total benefits this past year of which $5045 was Part A, $5092 Part B and $1773 Part D (more about Parts A, B and D later).

If you don’t think Medicare can be incredibly helpful, consider this. Both my parents died after long hospital stays and it cost them (or us) practically nothing. I have a friend who had emergency surgery last year. The total bill for his surgery and hospital stay was north of $120,000. What did it cost him? A little over $1200.

If you haven’t noticed, the cost of medical care has skyrocketed over the past 10 years. Consumer Reports recently reported, “Person for person, health care in the U.S. costs about twice as much as it does in the rest of the developed world. In fact, if our $3 trillion health care sector were its own country, it would be the world’s fifth-largest economy. “

If you haven’t yet reached the age where you’re eligible for Medicare we don’t have to tell you how expensive health insurance can be. But even if you’re a number of years away from 65 there are some things you need to know about Medicare before you need it.

There are four parts

There are four parts to Medicare. Part A includes hospital insurance. Part B includes medical insurance. Part C is known as Medicare Advantage. It includes all the benefits and services of Parts A and B along with some additional benefits and is operated by Medicare-approved private insurance companies. Part D, which was introduced under President George W. Bush, added prescription drug coverage.

The eligibility requirements

To be eligible for the original Medicare (Parts A and B) you must be either a U.S. citizen or legal resident and age 65. You would also qualify if you have been entitled to Social Security disability for at least two years, have end-state renal disease, require transplant or dialysis and are currently insured.

When to enroll

If you receive Social Security, U.S. Civil Service or Railroad Retirement benefits you will be automatically enrolled in Medicare Part A. If not there is an important seven-month enrollment period that overlaps your 65th birthday. The way it works is that if you want immediate coverage you must apply three months before you turn 65. If you wait and apply during the four months following your 65th birthday, you won’t have coverage for one to three months after you enroll.

If you fail to enroll during the seven-month period you will be penalized unless you or your spouse has health insurance where you work. The way this penalty works is for every year you fail to sign up, your Part B premium will go up 10% … and that’s forever.

There is a special enrollment period if you or your spouse is over 65 and covered by health insurance at your workplace. If this is the case you could delay signing up. If you do enroll then Medicare becomes the second payer. And if you enroll in Part B you will receive practically no benefits. You may also lose your Medicap enrollment guarantee.

What it costs

Generally speaking there is no cost for Medicare Part A. If there is some reason why you don’t qualify you can buy Part A coverage for a premium.

If you are eligible for Part A you’re also eligible for Part B. However, it ‘s optional. Premiums for Part B coverage start at $104.90 and are based on your adjusted gross income. If you sign up for Part B it will be automatically deducted from your Social Security monthly payments. Part B covers physician and outpatient care, home health, medical supplies and preventive services. It requires a co-pay of 20% of the covered benefit.Medicare doesn’t pay for everything

As great as Medicare can be, Parts A and B won’t pay all your medical expenses because of their deductibles and co-pays. In the case of Part A (hospital) coverage, there is a cost or deductible of $1216 for the first 60 days. It then jumps to an additional $321.50 a day for days 61 through 90 and then $630 a day for hospital stays beyond that.

These deductibles and co-pays are reasons for the afore mentioned Medigap or Medicare Supplement Insurance, which is designed to fill the “gap” between what Medicare covers and its deductibles and co-pays. There are 10 standardized Medigap policies to choose from. As you might guess, the more these plans cover the more they cost. As an example of this, Medicare Supplement Insurance Plan “A” includes 100% of Parts A and B but not the Part B deductibles. Plan C covers 100% of Parts A and B and includes 100% of Part B deductibles. Plan G is sort of the Cadillac of these plans as it provides 100% coverage of all deductibles, co-pays, excess charges; hospice care and skilled nursing facility care coinsurance.

The paperwork

The one downside of Medicare coverage is the bills and it’s important to review them carefully. We know that when you see your charges there will be a lot of medical mumbo-jumbo thrown at you so you may have to get out your dictionary or call your healthcare provider for some explanations. As an example of this the term “transdermal Clonidine procedure” means you had a Clonidine patch for some period of time. If you don’t remember having a patch or if you don’t have hypertension (which is what Clonidine is meant to treat) you need to call and dispute this.

medical debtBe sure to pay you bills

As painful as it might be you need to pay your medical bills as quickly as you can. If you don’t, your healthcare provider(s) could turn them over to a bill collector and this is something you definitely don’t want to happen. If you can’t pay your bills you should contact your healthcare provider and ask about arranging a payment plan. Depending on your circumstances you might also be able to negotiate a reduction in you bills. Barring that you could put the charges on a credit card or cards or get a debt consolidation loan. While these alternatives might not seem very appealing they are definitely better than letting your medical bills go to a collection agency as this would not only have a bad effect on your life but would also severely damage your credit score.

Can Medicare Really Help Seniors Avoid Medical Debt

man tripping on insurance documentsOne of the fears of retiring individuals is how they will ensure that their funds will outlast them. Given their age and physical condition, they are unable to earn money to help them finance their needs. This puts them at a risky situation.

Of all the expenses that retirees are faced with, the most important tip to keep their retirement fund from retiring is to make sure that their health care costs are covered. Otherwise, they can put themselves in danger of medical debt.

The thing about getting old is the deterioration of your physical body. Even those who have the most robust body when they were young will eventually have their strength fade away. This is a fact regardless of your lifestyle. Among the things that you need to prepare for in retirement, is your ability to pay for these costs. They will come. That is certain for everyone.

Health care costs endanger retirees to be in debt

But while there is a need to prepare for health care costs, we are sometimes taken off guard by how expensive it is to get medical treatment. This is how a lot of us end up in medical debt. conducted a survey back un June 2013 and it showed the following statistics:

  • An estimate of 56 million Americans (64 years old and below) is expected to struggle in paying off their medical bills. 35M will be contacted by collection agencies, 17M will have a lower credit rating and 15M will use up their savings to try and stay out of medical debt.

  • 10 million citizens below 65 years old will not be able to afford paying for basic necessities because of health care expenses.

  • 1.7 million will declare bankruptcy because of unpaid medical expenses.

If this true for the younger ones, how more perilous will it be for retirees. Those within the ages 19 to 64 years (the main respondents of the NerdWallet study), are all still within the working age. The chances of them being able to earn income to pay off what they owe puts them in a better position than their elders.

The same study also noted that the main reason why medical debt is more likely to happen is because of the rising cost of health care. While some people should be responsible enough to save up for this, the high cost can sometimes make it inadequate. This is what is really causing the indebtedness of a lot of people. In some cases, consumers are opting out of getting medical treatment or following on their medical doses because it is just too expensive for them.

In fact, the National Conference of State Legislatures (NCSL) reported that health spending in the country last 2013 was estimated at $2.9 trillion. While the growth compared to the $2.8 trillion in 2012 is relatively small, the amount in itself is staggering. The report published on showed that the average spending in 2011 was $8,680 per individual. The report believes that this will go higher once the actual 2013 figures come in.

So what are the chances of our elders to avoid medical debt when health care costs continue to rise? How can they hope to give themselves the right treatment as their bodies age?

Facts about Medicare that can help avoid health care debt

This is where Medicare actually steps in to provide help with medical bills. One of the things that you need to accomplish before you retire is to understand how this government program can benefit you once you reach retirement. In most cases, people are scared that the coverage of this program will not live up to the health care benefits that you got through your employer.

Well there is only one way to find out and that is what this article will try to help you with.

So how does Medicare help seniors and will it keep them from medical debt? Here are important facts that you need to know about it.

  • While it is run by the federal government, the doctors, hospitals and laboratories are mostly private. They only enter into Medicare contracts and that is how 75% of your bill with them gets paid by the government. If your family doctor has a contract with Medicare, then you are free to continue consulting with them while letting the government pick up most of your tab.

  • Medicare, is not really free. It is, in essence, still a health insurance that you have to pay for on a monthly basis – just like the health insurance provided by employers. Unless you are eligible to get low-income assistance from the state, then this is something that will still go out of your pocket. Visit to know more about the costs that you need to pay off.

  • The great thing about Medicare is you get a lot of options. You have the traditional plans that allow you to go to any doctor in the country or state. There is also the various Medicare Advantage health plans that are oftentimes similar to private health insurances. Sometimes, you can choose from 50 health plan options. This makes it ideal to have a plan that will suit your personal health needs. For instance, Part A means you are covered for hospital stays, home services and hospice care. Part B covers the professional fee of the physician, outpatient expenses and any medical equipment that you will have to pay off. You can combine these and end up with the Traditional Medicare or just get one for your use. Part C, or more commonly known as the Medicare Advantage combines Part A, B and in most cases, D. Part D covers payments for prescription drugs. There is also the Medigap that covers the out-of-pocket expenses of Traditional Medicare.

  • Medicare will not charge higher premiums for existing ailments – which means you can choose to get covered for almost any health related concern.

  • There is a requirement to work long enough to be able to qualify for this health insurance. Also, you cannot avail of this when you decide to retire early. It has to be when you reach the age of 65. That means you may have to deal with a couple of years without health coverage – unless you go for a private insurance plan.

In essence, Medicare is a monthly premium that you have to pay off so you can prepare for the health expenses that you will have in the future. It is a good idea to get this so you can avoid medical debt. Any out of pocket expenses will not be as damaging as it should be if you opted out of this government program.

How to finance your medical expenses and avoid credit

Getting ready for retirement requires you to go through a lot of tasks and it all begins with knowing. If you know that your family has a history of hereditary ailments, you may want to make sure that you are prepared for this. Apart from learning about Medicare, here are a couple of tips that can help you deal with the unexpected medical costs that can put you in debt.

  • Know your other options. Apart from Medicare, if you know that you will need more coverage, research on the right health insurance that can give you what you need. In most cases though, Medicare can supply what you generally need.

  • Get your dietary intake straightened out. Prevention is better than cure and most health related problems can be dealt with by eating right. If your family has a history of diabetes, then ease off the sweets. If you have a history of heart ailments, then stay away from food that will endanger your heart.

  • Live a healthy lifestyle. Lastly, make it a point to take care of your body. Exercise, sleep well and prepare yourself for old age. You only feel weak when you stop doing something.
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