How do you save money on Medicare?
It's a big question that many of America's seniors and their family members are trying to answer. And for many, it’s a tough question to answer, because most just aren’t that familiar with the general setup of Medicare programs.
As the major overarching government program for elderly persons’ health coverage, Medicare and supplementary policies, such as a Medicare Advantage plan, are important for ensuring that these recipients don't need to pay for their healthcare costs out of pocket.
Some of these out-of-pocket costs can be prohibitively expensive to seniors, which is why Medicare and supplemental policies offer a menu of options for insurance coverage. These are supposed to be effective financial protection for seniors, even on a fixed income, but how Medicare is navigated makes a big difference too.
These tips will help Medicare recipients choose wisely and maximize the value they get for managing their healthcare costs over time.
One of the best pieces of advice for Medicare recipients is to take advantage of open enrollment during the times of year that it's available. For example, open enrollment for Medicare Advantage and Part D plans is October 15 to December 7 of each year.
Seniors can use this opportunity to switch from “original Medicare,” or simple Medicare plans, to a Medicare Advantage plan that will cover more of their medical costs or fine-tune and refine coverage according to their needs.
Here's a side point that will also help seniors and family members to plan.
It's important to understand the need for Medicare Advantage plans in the context of how this program works. Medicare coverage has various parts — Parts A, B, C, D, and E. Parts A and B provide for different kinds of major inpatient and outpatient coverage. Part D provides for prescription drug benefits. Parts C and E are fundamentally different: Medicare Part C is actually the Medicare Advantage plan, which wraps up parts A and B in offering more comprehensive coverage. Sound confusing? To many seniors, it is, at least at first, which is why community support for navigating these programs is so important.
By understanding the various Medicaid parts, seniors can get more strategic in choosing Medicare and Medicare Advantage plans, and safeguard their finances while providing for better quality of life and longevity with health benefits. Seniors should also understand how the provision of Parts A and B differ from Part C or “Advantage,” because although Parts A and B are from the government, Part C is from private companies that supplement what the original program covers.
Another major tool in the Medicare recipient’s toolkit is an HSA, or health savings account. These tax-free plans are set up to help individuals manage healthcare costs by paying different kinds of medical bills with pretax dollars.
To that end, experts suggest that recipients should be putting on their accountant’s hats every year and making a detailed evaluation of their medical costs to project what they would need for the year ahead. Then they will take those specific costs and tailor them to the HSA as well as any Medicare or Medicare Advantage plans that apply. So to the extent that the family can project costs, the Medicare beneficiary gets more closely tailored coverage, less money is wasted, and less money is spent over a year’s time. That’s a big win for those who plan ahead and view this as a major part of Medicare insurance planning.
Here's another reason that Medicare supplemental plans are so important.
Simply speaking, even though original Medicare plans may cover certain healthcare costs, they may not provide 100% coverage. Even a supplemental plan will often have some of these coverage gaps, which means the beneficiary or advocate has to do more research and figure out how these may apply.
One of these extra costs comes in the form of a deductible. If a deductible is extremely high, that means the recipient of Medicare benefits will have to pay a lot out of pocket before accessing cost assistance on any given claim.
Co-pays also apply, which can be in the range of hundreds of dollars for hospital care or other significant services. So this is something to look at as you put together a Medicare or Medicare Advantage plan for insurance coverage for an elderly person over 65 years of age.
Another key issue with these types of policies is the provider networks they include.
Any given Medicare plan or supplemental Medicare plan will typically have a provider network that applies. That's important because most seniors have an idea of where they access healthcare services in their community. There may be only one major medical network in the local area, or there may be more than one. Seniors and their families may have a preference of where they are treated based on transportation or other logistical factors.
So the provider network determines how Medicare or supplemental plans will pay out based on where patients are seen and treated.
In evaluating the provider networks, though, it's important to note that provider networks can change for a given policy. Some will be narrower or broader than others, which gives seniors more choice in their doctors and where they can go for provider services.
By selecting the plans with the best provider network, seniors can assure that they will avoid more out-of-pocket costs over time.
Along with researching the networks, it's great to get a granular idea of which doctors practice in what facilities and networks, and how that might change over time. On the one hand, a community may have a traditional small provider office that hasn't yet merged with a regional medical network. On the other hand, this type of merging and network change is happening rapidly in many areas. That makes it important to track changes in your community and apply those to the Medicare or Medicare Advantage plan that you have selected or may select in the future.
Getting access to transparent policy quotes and more is what allows the beneficiaries to make the decisions that are right for their budget and their healthcare needs.
Here's another aspect of supplemental Medicare plans where things can be confusing for families. Understanding Medigap policies also means going back to that complex math on what original Medicare does and doesn’t cover — and evaluating not only Parts A and B but the landscape of Medicare Part C as well.
A Medigap policy addresses the existing gaps in Medicare or Medicare Advantage supplemental plans but includes a kind of confusing alphabet soup of options.
Some Medigap policies are also contingent on enrollment in Part B or other open enrollment options, which is another thing for planners to keep in mind as they evaluate whether they need a Medigap policy or not — and if they do need one, how to get the right one.
This additional tip is different from the ones above. It involves looking for skilled assistance in determining what types of Medicare or Medicare Advantage plans a senior needs.
Some communities have local public service agencies that provide assistance with Medicare. Another option is to seek assistance from skilled policy experts like those from PolicyScout, where professionals can assist in explaining the ins and outs of Medicare to potential beneficiaries, providing cost information and more.
With the right information and assistance, families can tailor Medicare coverage for senior family members in order to avoid excessive healthcare costs and anything else that may threaten the family’s finances when care and treatment are needed.