Medicare and Retirement: Things You Need To Know
When you get to your retirement age, you start to ponder on things as your financial status will never be the same as when you were still employed. One of the most important aspects of your life is your health and keeping it in good condition.
While you were employed, a percentage of your earnings went to your Medicare. But then, is the original Medicare plan enough for your needs? Medicare supplement plans do exist, which you may want to explore to avoid financial burdens if your body would require medical attention.
Here is some information regarding the Medicare plans that you may need:
Medicare Part A (Inpatient Coverage)
You are automatically covered for this benefit if you or your spouse have been employed and have paid for Medicare and payroll taxes for Social Security for a minimum of ten years.
Part A covers your admission in a hospital and nursing care, as well as if you’re required to stay in a facility or hospice for further attention. It needs to be taken note, though, that Part A does not cover the doctor’s fees.
For 2019, the Centers for Medicare & Medicaid Services (CMS) has set the inpatient deductible and coinsurance for Part A holders in the following terms:
- The deductible is set at 1,364 USD. This amount must be met first before Medicare Plan A will help in paying for your daily hospital bill.
- Coinsurance is set at 341 USD on the 61st-90th day. The amount is the patient’s share on his or her admission daily rate.
Medicare Part B (Outpatient Coverage)
This is the part that pays for your medical outpatient needs. For instance, you may need to visit a doctor for a check-up. Part B will cover a portion of the doctor’s professional fee.
Other services that are covered by Part B are:
- Ambulance services
- Laboratory tests
- Outpatient procedures
- Purchase of medical equipment
- Rehabilitation therapy
For 2019, the deductible for Part B is 185 USD.
Medicare Part C (Medicare Advantage Plan)
This is an optional coverage that is provided by private health insurance providers. One must be enrolled in Part A and B first before you can opt for a Part C plan. This plan covers additional healthcare services like dental and vision, which may not be covered by Original Medicare.
This plan is organized by health maintenance organizations (HMOs) or through another option, which are preferred provider organizations (PPOs). Whichever of the two you’ll get, it means that you have a set of preferred health providers. If you choose to have a consultation with a doctor that is not on the preferred list, you’ll pay a higher copay, or there’s a tendency for it not to be covered depending on your plan structure.
Most of Part C plans have incorporated prescription drug coverage, too.
Medicare Part D (Prescription Drug Plan)
If you did not opt for a Part C coverage and only maintain the Original Medicare, this plan might be a wise addition to your healthcare insurance package. Part D covers for your prescribed medication, be it for maintenance or not. Take note that it is only for prescription medications and not for over-the-counter (OTC) drugs.
Part D has four phases of coverage that you must fully understand to avoid confusion. Below are the said phases:
- Deductible Phase – CMS has set the deductible for 2019 at a maximum amount of 415 USD. Depending on your plan type, you may have a lower amount than the fixed amount. You must satisfy whatever the deductible amount set by the plan so that the plan will cover a portion of your medication cost.
- Initial Coverage Phase – There are three important concepts that you need to remember during this phase.
- Total drug cost (TDE) – the amount set by CMS for 2019 is 3,820 USD. If this amount is met, then your Part D coverage will proceed to the next coverage phase.
- Copayment – the fixed amount you will pay for medication. This is set by the plan provider, the amount of which varies if your drug is generic or branded. Mostly, tier 1 up to tier 3 medication is under copayment.
- Coinsurance – this is also known as percentage copay. This is applied towards medication that are costly and which belong to tier 4 or higher. For instance, your plan requires you to pay 20% for a branded medication that is categorized as part of tier 4 on your prescription drug coverage list.
- Coverage Phase or Donut Hole – As you have consumed the TDE of 3,820 USD, your plan during this phase does not cover for your medication. However, you only pay 25% for your branded medication and 37% for your generic medicines. The 75% for branded and 63% for generic are paid for by the manufacturer and the government. For you to get out of the donut hole, you need to meet a total of 5,100 USD maximum out of pocket (MOOP) for your coverage to get on the fourth phase.
- Catastrophic Phase – As you have satisfied the MOOP for your coverage period, you now then pay 5% of your branded or generic medication. For 2019, it’s 3.40 USD for generic and 8.50 USD for branded. Whichever is greater, that’s the amount that you need to pay.
Above are the details of your Medicare. You do have options, and it’s up to you to choose and mix whichever suits your healthcare needs. Before you pick a plan, you may want to shop around which providers offer the best deal for you. The key, though, is understanding the basics so you will be able to choose wisely come your retirement age.