Medicare, the government-provided health insurance program for people aged 65 and older – will be an important part of your retirement planning. With the cost of health care outpacing inflation each year, planning for your future medical expenses is more important than ever. And yet, many retirees don’t fully understand how the Medicare program works. Hopefully, we can clear up a few of your misconceptions and provide you with some basic information to get started in your planning process.
Medicare Parts A and B are also known as Original Medicare. Part A covers hospital bills, and is covered by the payroll taxes you paid while working. Part B pays for doctor visits and other medical services, such as screenings for chronic diseases. If you want Part B coverage, you will elect to pay an extra monthly premium for it.
Medicare Part C plans are also known as Medicare Advantage plans. These are Medicare-approved plans that are offered by private insurance companies as an alternative to Original Medicare. These plans cover hospital and doctor visits, and often include prescription coverage as well.
Medicare Part D plans are Medicare-approved private plans that help to cover prescription drug expenses. Typically, people who are covered by Original Medicare might elect to enroll in Part D as well.
The most common misconception about Medicare is that it covers all medical expenses needed by seniors age 65 and older. As you can see, coverage actually varies according to which plan you choose. And many services, such as dental and vision care, are not covered by Medicare at all. You might elect to enroll in a separate dental or vision insurance plan, or cover those expenses on your own.
Even if you have one or more Medicare plans, you will be paying some premiums, deductibles, and co-pays. This is why planning for medical expenses is such an important part of retirement planning. Remember to leave room in your budget for out-of-pocket costs, and call us if you have any questions about supplemental coverage. We can help you weigh your options and choose a plan that helps you control your medical expenses.