Here's what to do if you're part of that statistic.
Maurie
Backman (TMFBookNerd) Feb 19, 2020 at 8:36AM Author Bio
Many seniors are shocked to learn that
healthcare coverage under Medicare is by no means free. Quite the
contrary -- there are numerous costs associated with Medicare, from monthly
premiums to annual deductibles to coinsurance and copays. And when you're on a
fixed income, which is the case for many Medicare patients, those costs can be
an enormous burden.
It's not surprising, then, to learn that 63% of
Medicare enrollees worry about surprise bills following medical treatment, according
to a new survey by online
health insurance exchange eHealth. If that's a concern for you, here are a few
things you can do.
1. Understand your
built-in costs
Generally speaking, when you receive care under
Medicare Part B, which pays for everything from doctor visits to diagnostic
tests to durable medical equipment, Medicare will cover 80% of the cost,
leaving you to pick up 20% of the tab. This assumes, however, that the service
in question is a covered service. If it isn't, you could get stuck with
the entire bill. If you're not sure whether your service is
covered, ask. It's an easy way to avoid unpleasant surprises.
Another thing: When you're admitted to a hospital
under Medicare Part A, you'll be subject to a deductible that can change from
year to year. Currently, that deductible is $1,408. In exchange, you pay
nothing other than that deductible for your first 60 days in a hospital, but
from there, your next 30 days will cost you $352 each. Knowing what costs
you're liable for will help you plan accordingly so that when you start getting
bills, they aren't shocking.
2. Get supplemental
insurance
Clearly, there's a host of expenses you might
encounter under Medicare. A good way to minimize them is to purchase
supplemental insurance known as Medigap. Medigap can pick up the tab for
deductibles and copays so you're not left to cover those bills alone. That
said, Medigap won't pay for services that Medicare itself won't cover, so
you'll still need to account for those costs yourself. For example, Medicare
won't pay for dental exams, hearing aids, or vision tests. If you need these
services, you'll continue to pay out of pocket even if you have Medigap
coverage in place.
3. Sock away funds for
future healthcare expenses
If you're not yet retired but are worried about
affording healthcare under Medicare once you do leave the
workforce, make an effort to contribute to a health savings account, or HSA. With an HSA,
your contributions go in tax-free, so there's instant savings involved. You can
then withdraw funds as you need them for immediate medical expenses, or invest
the funds you're not using and carry them into retirement, when healthcare can
eat up even more of your budget.
You're eligible for an HSA if you're enrolled in
a high-deductible health insurance plan. For 2020 purposes, that means an
individual deductible of $1,400 or more, or a family deductible of $2,800 or
more. If you qualify, you can contribute up to $3,550 to an HSA this year as an
individual, or up to $7,100 on behalf of a family. And if you're 55 or older,
you get a $1,000 catch-up contribution on top of these limits, similar to the
catch-up provision you'll find in popular retirement savings plans like IRAs and
401(k)s.
Though Medicare offers critical health benefits
to millions of seniors, the costs you encounter under it could be quite
substantial. If unplanned bills under Medicare are a concern for you, read up
on how your benefits work, get supplemental insurance, and, if you're not yet
retired, set aside money in an HSA. Doing so could help you avoid a world of
financial and emotional stress at a time in life when you deserve better.
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