Your finances may not be the first thing that comes to mind when you think of Medicare. But enrolling in Medicare can be confusing and if you don't have the right coverage, you could end up with some steep medical bills. With medical debt continuing to be the number one reason for bankruptcy in the United States, you want to make sure you're adequately covered.
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Part A covers hospitalization, some skilled nursing facility services, some home health care, and hospice services. In most cases, Part A is premium free.
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Part B covers doctors' services, preventive care, outpatient care, including lab work, X-rays, and medical supplies. There is a premium for Part B.
Parts A and B are provided to you through the Federal government. If you fail to enroll within your seven-month window, both Part A and Part B carry a late enrollment penalty. Parts C and D, on the other hand, are managed by private insurance companies that contract with Medicare to provide Parts A and B benefits. (Like we said, Medicare can be confusing.)
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Part C, also known as Medicare Advantage Plans, includes Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. These plans carry a premium as well.
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Part D is prescription drug coverage and is offered through private companies. It cannot be purchased as a stand-alone policy. Most Medicare Advantage plans cover drug costs.
What does it cost?
If you're on Original Medicare (Parts A and B), you can easily be deceived by their small monthly premiums. While it's true that, generally, Medicare provides a lot of coverage for a much lower price than you'd get with any other insurance plan, there are a couple of plan features that can make Original Medicare financially devastating.
Original Medicare usually carries a 20 percent coinsurance for medical services. For a $300 doctor's appointment, a $60 may not break the bank. But for services that cost thousands, such as x-rays, chemotherapy, colonoscopies and more. that 20 percent starts to add up fast. Plus, there's no cap on the exposure you may face. That's where Medicare Advantage comes in. It helps to limit your out-of-pocket expenses.
Saving money
Setting aside money for healthcare may help you better budget and keep track of your medical expenses. Plus, keeping your money in an interest-bearing account, like Popular Plus Savings, which offers a competitive rate, can help make your savings work harder for you. Plus, there are other great ways to save. Programs like SilverSneakers work with many health plans to offer gym memberships and fitness classes at no cost. So you can take your monthly gym premium and put that back into your savings account. With a little healthcare planning, you and your savings can stay quite healthy!
The information mentioned in this article is for informational purposes only, is intended to provide general guidance and does not constitute legal or tax advice. Each person's situation is unique and may materially differ from the information provided herein. You should seek the advice of a financial professional, tax consultant and/or legal counsel to address your specific needs before any financial or other commitments regarding the issues related to your situation are made. Popular Bank does not make any representations or warranties as to the content contained herein and disclaims any and all liability resulting from any use of or reliance on such content.