There isn’t any bigger medical insurance program in the US than Medicare. In keeping with the Facilities for Medicare & Medicaid Providers, greater than 57 million individuals have been receiving well being advantages by this system as of March 2017.
However simply because tens of millions are on Medicare doesn’t suggest that most individuals, particularly those that have but to hit 65, perceive how this authorities program works. Most individuals as a substitute imagine a number of simply debunked myths about what Medicare does, how financially wholesome it’s, and what it would not do.
1. Medicare gained’t be round for me
You would possibly fear that Medicare will not be round to cowl your well being care wants by the point you retire. This is some excellent news: Medicare just isn’t broke … but.
The Medicare program had about $200 billion in reserves on the finish of 2015. So this system does have cash.
There’s some concern, although. Medicare is projected to run a surplus yearly by 2020, when a rising variety of Child Boomers will begin retiring. Which means that Medicare will then run at an annual deficit starting in 2021. If nothing is finished to stop this, this system will exhaust its reserves by the yr 2028.
That will likely be an enormous downside whether it is allowed to occur. There are doable options, although, despite the fact that they’ll require some monetary ache. The obvious one can be to boost Medicare taxes. That will not make anybody pleased, however it’s the easiest method to make sure that Medicare does have sufficient to cowl all of its beneficiaries.
2. There’s just one sort of Medicare
Medicare is a sophisticated system. In actual fact, there are literally 4 kinds of Medicare protection.
Medicare Half A and Half B are half of what’s often known as unique Medicare. Medicare Half A, often known as hospital insurance coverage, covers inpatient care acquired at hospitals and nursing amenities. Half B covers providers and provides that you have to deal with well being situations. This a part of Medicare covers outpatient care, preventive providers, ambulance rides, and medical tools.
Medicare Half C is a little more sophisticated: It is the a part of this system that makes it doable for personal medical insurance corporations to supply Medicare non-public well being plans — within the type of HMOs and PPOs — often known as Medicare Benefit Plans. You possibly can elect to obtain your medical advantages by a mixture of Medicare Half A and Medicare Half B or from considered one of these non-public Benefit Plans. (See additionally: eight Ideas for Getting the Most Out of Your Medicare Plan)
Medicare Half D subsidizes the price of your prescribed drugs. This a part of this system is sometimes called the Medicare prescription drug profit.
three. You may by no means should pay for medical insurance when you’re on Medicare
Medicare will cowl a lot of your medical insurance wants. However there are some prices that you’re going to nonetheless must cowl by yourself.
As an illustration, Medicare does include deductibles that you should pay earlier than the insurance coverage kicks in. These deductibles can change annually. For 2017, Medicare Half A comes with a $1,316 deductible per profit interval on your hospital stays. Which means that when you do find yourself within the hospital, you may should pay this quantity out of your individual financial savings earlier than Medicare will cowl the remainder of your bills.
Medicare Half B has a deductible of $183 for 2017. Once more, you may should pay this quantity earlier than your Medicare protection kicks in. And even after Half B protection begins, you may nonetheless have a copay. Medicare Half B typically covers 80 p.c of your medical providers. You may should cowl the remaining 20 p.c of those prices by yourself.
There are additionally coinsurance funds. Should you should keep in a hospital for greater than 60 days, you may should make a coinsurance cost on your Medicare Half A advantages.
four. Medicare covers all my medical wants
There are some medical providers that Medicare doesn’t present any protection for. Sadly, these providers aren’t precisely frivolous ones.
Medicare doesn’t present dental protection. It additionally would not pay for imaginative and prescient examinations for glasses. You possibly can’t depend on Medicare to cowl the prices of dentures or listening to aids. And when you want long-term care, Medicare once more will not present protection.
You should purchase specialised insurance coverage packages to cowl these medical bills. However you may should pay for the plans by yourself. (See additionally: Is Lengthy Time period Care Insurance coverage Price It?)
5. I will not should pay any premiums for Medicare
Most individuals will not pay any month-to-month premiums for his or her Medicare Half A protection. That is the excellent news. The dangerous information? You’ll pay a month-to-month premium for Medicare Half B.
As of 2017, the Half B premium stood at $134 a month. Medicare, although, says that most individuals who get Social Safety advantages pay lower than that, for a mean month-to-month premium of $109. This premium is normally deducted immediately out of your Social Safety advantages. You will not be writing a verify every month, however you may nonetheless be paying for that Half B protection.
You may additionally should pay a premium every month when you elect to enroll in a Medicare Half C plan. These premiums will fluctuate relying in your plan. Medicare Half D comes with a month-to-month premium, too, although this can fluctuate in line with your particular plan.