How to cut your costs on Medicare coverage

Do you want to cut costs on Medicare? You won't be alone.

You may have wondered how to save money on Medicare if you are currently on it or will soon turn 65. Saving money is like anything else that requires effort on your part. However, there are numerous easy solutions. It might appear impossible. Not at all.

Saving money on Medicare can often be done in a similar way to saving money on other things. It will be difficult to save money on Medicare and other healthcare costs if you are someone who cannot save money in general.

You must first conduct a financial self-assessment of your health in order to truly save money on Medicare. Is this a requirement that you be a doctor? No, all you need to do is examine your current state of health in the mirror. Provide responses to the following inquiries:

• How much have you paid for your health care in recent years, including premiums?

• How much did you spend on medications on prescription?

(Take note that these two are easily accessible on the website of your health insurance provider, regardless of whether you have Medicare.)

• Do any diseases or conditions run in your family?

• Do you prefer a plan that covers nearly everything or are you ok with paying out of pocket?

The best Medicare plan for your situation will be determined by your responses to these questions. A Medicare Supplement plan may be better for you than a Medicare Advantage plan, for instance, if you have a long-term, costly chronic condition or had a lot of out-of-pocket expenses.

Additionally, it is essential to compile a list of your healthcare providers and medications. If you are exposed, you will require assistance through the "donut hole" and the appropriate Part D prescription drug plan. On that, more in a moment.

What you want to accomplish: You want to implement the "Goldilocks" strategy. It is the one for which you pay either too little or too much. Alternatively, one that is "just right" in terms of cost, coverage, and your particular health and financial circumstances. Some people pay too little or too much for their Medicare insurance plan's premiums, resulting in higher out-of-pocket expenses.

Throughout our working lives, the majority of us contributed to Medicare. We were able to pay for Part A (hospital care) thanks to this. As a result, most of us do not have to pay for Part A when we enroll.

However, the situation is different in Part B. Part B (doctor services) is something we are required to pay for, and the amount we pay is directly proportional to our modified gross adjusted income from the previous two years. Your 2018 MAGI is used to calculate your 2020 Medicare Part B premiums. In 2020, for single-payed people with under $87,000 MAGI and joint filers with $174,000 MAGI, your month-to-month Part B premium is $144.60. A MAGI that rises above these levels raises the Part B premium.

You might wonder how you can mitigate this if you are in a higher income bracket. Prepare a spending, cash flow, and tax strategy. Understanding the various tax income options is important. You should also try to avoid using your retirement savings and keep enough cash on hand. At the end of the day, you should work with a qualified advisor who has previously created retirement income plans.

Are you aware of your enrollment deadlines? One of the keys to saving money on Medicare is this. This is a major oversight that many Medicare beneficiaries make, and many do not.

A seven-month window for your Original Medicare (A&B), Medicare Advantage (C), and Prescription Drugs (Part D) begins three months prior to your 65th birthday. In addition, the window for purchasing a Medicare Supplement plan extends for an additional six months if you have done your research and wish to do so instead.

What is the significance of these initial enrollments? There will be a penalty if you don't sign up when you first become eligible for Medicare.

For every 12 months you should have been enrolled, the Part B penalty is 10% of the premium. Because of the lifetime penalty, it is critical to get it right the first time. Similarly, you will suffer a consequence if you don't pursue Part D physician-endorsed drugs when first qualified. The penalty for Part B is not the same as that one. Therefore, in order to save money on Medicare, it is essential that you are aware of these enrollment periods.

What happens if you continue to work after the age of 65 or are covered by an employer-sponsored retirement plan? You can delay your enrollment period once you leave your employer plan as this is an allowed exception. There will be a separate election period for you. You won't be penalized as long as you make your choices during the special election period.

In addition, during Medicare's annual election period, you are free to make changes to your plan. This time period begins on October 15 and ends on December 7. You can choose to drop out of your current plan and enroll in a different one during this time. Changes made to the plan during this time will take effect on January 1st of the following year.

When it comes to Medicare insurance plans, there are actually three common choices (there are also plans for people with special needs, like Medicaid beneficiaries). This article does not cover these plans). Your assessment of your own health will determine which option you choose. Because it will save you money, the self-assessment is important.

Take note of the fact that some plans offer more benefits than others. The range of premiums is: Usually, a lower monthly premium means more money out of pocket, and vice versa. You could pay anywhere from $200 to $500 per month or more depending on the Medicare Advantage/Medicare Supplement plan you choose, the Part B premium, and the Part D premium.