The world of Medicare can be confusing at times, especially if you’re just starting out. However, understanding Medicare in 2022 is essential so you can make informed decisions about your health coverage.
What is Medicare?
Part of understanding Medicare includes knowing what it is. You can better understand Medicare by visiting this link: boomerbenefits.com/understanding-medicare/
First introduced in 1965, Medicare is a health insurance program run by the federal government. It was created to provide healthcare coverage for those 65 and older and people with qualifying disabilities under 65. There are four main parts that makeup Medicare: Part A, Part B, Part C, and Part D.
Part A covers your inpatient services, skilled nursing facility stays, home health care, and hospice care. Generally speaking, Part A helps to cover the costs of your room and board as an inpatient in a hospital.
If you’ve worked in the United States for at least ten years (40 quarters), you will pay $0 for Part A. If you haven’t worked in the U.S. long enough, you will have to pay a monthly premium. Your Part A premium will be $274 in 2022 if you’ve worked in the U.S. for 30 -39 quarters. If you’ve worked less than 30 quarters, your monthly premium will be $499 in 2022.
Part B covers your outpatient medical services, including lab work, surgeries, doctor’s visits, vaccinations, and more. Part B should cover anything that Medicare approves as medically necessary, which are “health care services or supplies needed to diagnose or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.”
Unlike Part A, everyone must pay a monthly premium for Part B. In 2022, the standard Part B premium is $170.10. You may pay more for your Part B premium if your income is over a certain level.
Part C, also known as the Medicare Advantage plan program, is another way to receive your Medicare Part A, Part B, and Part D benefits. Private insurance companies run advantage plans, so you agree to receive your benefits from that plan and not Medicare when you enroll. However, you still have to pay your Part A and Part B premiums.
Advantage plans tend to have low monthly premiums, and some can even be $0. However, these plans usually have more out-of-pocket costs. There is a cap to keep you from spending too much during a year, but that amount can be as high as $7,550 in 2022. This is something you should keep in mind.
Part D is coverage for your prescription drug medications and certain vaccinations. Private insurance companies also offer these plans.
Part D plans have monthly premiums, and some may have a yearly deductible. The exact costs for a Part D plan will depend on where you live and your plan’s drug formulary (list of medications that are covered under the plan).
Medicare Supplement Plans
Although Medicare Supplement plans are not considered a “part” of Medicare, they are secondary insurance policies you can purchase. Supplement plans, also known as Medigap plans, help cover the costs left over after Medicare pays. Part B pays for 80% of approved medical services. This means you would be responsible for the remaining 20%. However, a Medigap plan can help cover all or some of this 20%.
Medigap plans have monthly premiums that vary depending on age, gender, tobacco use, zip code, and more.
Who is eligible for Medicare?
Most people are eligible for Medicare at 65 if they are a permanent resident who has lived in the U.S. for at least five years or a U.S. citizen. People who have been receiving Social Security Disability Insurance (SSDI) for at least 24 months are also eligible for Medicare. Although your work history can affect your Medicare costs, it does not affect your Medicare eligibility.
When should you apply for Medicare?
There are several Medicare enrollment periods meant for different situations. However, you will likely need to apply for Medicare during your Initial Enrollment Period (IEP). Your IEP is a time for you to enroll in Medicare Part A and Part B through Social Security. This enrollment period lasts for seven months, starting three months before your 65th birthday month and ending three months after your 65th birthday month.
You will also want to enroll in either a Medigap plan and a Part D plan or an Advantage plan during this time if you don’t have additional coverage. If you miss your IEP and do not have creditable coverage, you will likely be subject to lifelong late enrollment penalties for Part A, Part B, and Part D.
Which plans should you choose?
Once you’re enrolled in Part A and Part B, you should choose the right supplemental coverage for your needs. The right choice will depend on your personal preferences, finances, and health status.
A Medigap plan may be the way to go if you visit the doctor frequently and have some health issues, as these plans can offer comprehensive coverage. Additionally, with a Medigap plan, you can see any healthcare provider in the U.S. who accepts Medicare, meaning you have the freedom to choose your doctors without restriction.
On the other hand, an Advantage plan may be a good fit if you don’t visit the doctor often and don’t have many health issues. Advantage plans can also offer additional benefits that Medicare does not provide, including dental, vision, and hearing benefits. However, these plans are not as flexible as Medigap plans. They are restricted by network areas, and you may pay more out-of-pocket if you see a provider outside that area.
To help you decide, you should think of your budget, lifestyle, health, and more.
By doing your research and understanding the different parts of Medicare, you’ll better understand what coverage you need and how to move forward. The right plan for you may not be the right plan for someone else, so consider factors like your budget, lifestyle, and health to decide how you want your Medicare coverage to go in 2022.