Here's what you need to know to be financially prepared.
We're living through an unprecedented health
crisis, and while no one can be sure they're safe, adults over 60 have more to
fear from COVID-19, the disease caused by the coronavirus, than their younger
counterparts. This includes over 62 million Medicare beneficiaries. Minimizing
your risk of contracting the disease by following Centers for Disease Control and Prevention
guidelines should be
everyone's first priority, but if you believe you have it, you need to get
tested and possibly quarantined at a hospital, or isolate yourself at home.
All of this raises another question: Who pays
for COVID-19 testing and treatments? For Medicare recipients, the answer is,
fortunately, not you. But that doesn't mean you don't have to prepare yourself
for potential financial hardship if you contract the disease.
What COVID-19 expenses
does Medicare cover?
The U.S. government announced on March 3 that
Medicare Part B would cover all COVID-19 testing costs for individuals who were
tested on or after Feb. 4. Medicare Part A also covers medically necessary
hospitalizations, so if your doctor recommends that you remain in quarantine at
the hospital rather than self-isolating at home, you will not have to pay for
these costs. Medicare Part A has a $1,408 deductible, but you shouldn't
have a copay unless you're in the hospital longer than 60 days for some reason.
There is currently no vaccine for COVID-19, but
when one becomes available, all Medicare Part D plans will cover it. But if you
do not have Medicare Part D or a Medicare Advantage plan that includes
prescription drug coverage, you will have to pay out of pocket in order to get
the vaccine. Those with a health savings account (HSA) can use these funds for the vaccine.
Medicare also pays for most of the cost of
virtual check-ins with your doctor, which is a good place to start if you're
not sure whether you should come in for COVID-19 testing. This is where you
speak with your doctor by phone or video or through an online patient portal.
You can discuss your symptoms with your doctor and ask any questions you have,
and your doctor will decide whether you need to come in to get tested. This can
help you avoid unnecessary exposure to other potentially sick individuals. You
must consent verbally to these virtual check-ins and you will still be
responsible for paying your Medicare deductible and coinsurance.
Medicare Advantage plans offer the same COVID-19
coverage as Original Medicare, as required by federal law, but some plans may
provide additional coverage for telehealth or other related treatment. Check
with your Medicare Advantage plan provider for full details about what is and
is not covered under your plan.
Why you still need to
be financially prepared
The possibility of having to stay isolated at
home if you contract COVID-19 means that people who are claiming Medicare but
still working face potential loss of income that could make it challenging to
keep up with your bills. Isolating yourself at home may also require you to
stock up on essentials like food and toiletries to see you through a few weeks
of isolation. That could also be challenging for those who typically live
Social Security check to Social Security check.
Now is the time to build up an emergency fund,
before COVID-19 spreads any further. You might have to cut back on some of your
regular expenses to do this, like driving less to reduce your transportation
costs. (You might be doing this already in order to reduce your exposure to the
virus.) Rather than investing all your extra money into hoarding toilet paper
and hand sanitizer, keep it in a bank account where you can access it easily to
cover your expenses should you need to self-isolate.
Everyone should have an emergency fund that can
cover at least three months' of living expenses even when there's not a global
pandemic. If you don't already have one of these, focus on building a one-month
emergency fund now to help see you through a week or two of isolation.
isolation at home and help pay for your regular bills if staying home due to
COVID-19 would mean a loss of income.
If you're struggling to put together enough cash
for an emergency fund, you could try tapping your retirement savings, if you have any, though you may want to consider this a last
resort. Medicare recipients with HSAs can also withdraw money from these
accounts for non-medical expenses, if need be, though you will owe income tax
on these withdrawals.
Your health should be your first priority in the
midst of this global pandemic, but if you get COVID-19, you could have a
financial crisis on your hands. Understanding what your health insurance will
and won't cover related to the illness and building up an emergency fund before
the virus enters your neighborhood might help you avoid this.
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