Many Americans celebrate their 65thbirthday
because that’s the year they become eligible for Medicare. They hope they’ll
start paying less for medical insurance premiums, and also they no longer need
to worry about being denied insurance for pre-existing conditions. Indeed,
these are good reasons to turn 65!
Unfortunately, hitting that magic number
doesn’t mean you’re finished paying attention to how you’ll pay for medical coverage!
While Medicare may be called “medical insurance,” don't think it’s similar to
the health insurance your employer offered you while you were working. Don't
think that Medicare is the only health insurance you need. That would be a big
mistake!
Here are a handful of very significant
differences between Medicare and the typical medical insurance that’s offered
to American workers:
·
Many
employer-sponsored medical insurance plans are comprehensive, often covering
medical, dental, hearing, and vision services, as well as services that
complement traditional medical care, such as acupuncture or chiropractic
services. Not so with Medicare. It doesn’t cover vision,
dental, or the cost of hearing aids, nor does it cover acupuncture or most
chiropractic services. Medicare also doesn’t pay for any medical care you
receive outside of the U.S. To cover the cost of any of these services, you’ll
either have to pay out-of-pocket or look for a separate insurance policy that
supplements Medicare.
·
Most
employer-sponsored medical insurance is integrated into one plan that covers
the cost of hospitals, physician and outpatient services, and prescription
drugs. Not so with Medicare. It has separate coverage for
hospital costs (Medicare Part A), physician and outpatient services (Medicare
Part B), and the cost of prescription drugs (Medicare Part D). Each of these
“parts” has its own set of premiums, deductibles, and copayments.
·
With typical
employer-sponsored medical insurance, once you satisfy the deductible for the
year, the plan’s benefits kick in and you may only need to pay for copayments
or coinsurance. With Medicare, it’s possible that you might need to satisfy the
Part A deductible for hospital services more than once in a year, if you’ve had
services during two or more different “benefit periods.”
Medicare also limits reimbursements to health
care providers as a cost-saving feature. As a result, some physicians and other
health care providers decide not to accept reimbursement from Medicare. In this
case, you might not be able to continue seeing a doctor who was covered under
your employer-based health care plan.
As a result of all these differences, when you
sign up for Medicare, you’ll want to buy a separate health policy that
complements Medicare’s coverage. To avoid making a big Medicare mistake,
learn about your options as you approach age 65, so that you can make an
informed choice when you become eligible for Medicare. If you’ve already
attained age 65 and didn’t previously buy supplemental coverage, you have a
good opportunity to correct your mistake with the upcoming Medicare Open
Enrollment Period from October 15 through December 7.
Nobody said it would be easy to plan for
medical insurance in your retirement. It’s well worth your time learning about
your options–it could potentially save you thousands of dollars over the course
of your lifetime.
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