What do I need to know about Medicare cost planning?
Planning for Medicare costs starts with understanding your coverage options, enrolling on time and choosing a plan that fits your budget and health needs. You can manage your costs by reviewing premiums, comparing plan types and exploring financial assistance programs that may help reduce your expenses.
As Director of Strategic Accounts for Aetna, Frankie S. has to know Medicare inside and out. But her expertise goes well beyond familiarity with its rules and regulations.
She also knows how to translate the rules into strategies that help people get the most out of their Medicare coverage — while sticking to a budget that fits their lifestyle. She honed her skills helping people understand the costs of Medicare during her decade as a nursing home administrator. That's when she discovered her passion for helping mature adults. She chalks it up to loving their wisdom, experience and passion for life.
While working directly with her nursing home clients and their families, Frankie S. quickly learned that providing the best care often meant helping people navigate their health insurance coverage. A big part of her job was helping people find the best Medicare options for their needs.
“More than 20 years ago, I discovered I had a knack for helping people find the right Medicare coverage,” Frankie S. says. “And in one way or another I’ve been doing it ever since.”
But Frankie S. is quick to point out that selecting the right Medicare coverage means going with a plan that fits your entire lifestyle, not just your health care needs. So you’ll want Medicare coverage that also takes into account your budget and your long-term goals. After all, being prepared for the costs associated with Medicare coverage is a key element of enjoying your golden years.
Frankie S. sat down with Chris H., near her office in Cary, North Carolina. Chris H. will soon be eligible for Medicare benefits himself. While Chris H. is planning to continue working for a few more years, he’s also looking forward to his retirement. In fact, he plans to spend more time with his eight grandchildren and ramp up the mission work he does with his church. But he knows that making the most out of his retirement means being smart about both his finances and his health. That’s why he spoke with Frankie S. to get some tips about how to handle the costs associated with Medicare coverage.
Here are some highlights from their conversation.
Chris H.: In general, what are the biggest factors affecting how much I will pay for my Medicare coverage?
Frankie S.: Really, the biggest factors are the type of coverage and Medicare plan you choose. But there are other factors affecting Medicare costs that can be significant.
For example, if you don’t have group coverage like the kind you might get through your employer or through a union, you should sign up for Parts A and B of Medicare as soon as you’re eligible. Medicare Part A provides coverage for things like inpatient hospital stays. Medicare Part B provides coverage for things like doctor visits. You should choose a Medicare Part D plan, too. It provides prescription drug coverage. If you wait to sign up for Medicare Part B or Part D and you don’t have another form of coverage, you may end up paying a late enrollment penalty.
Learn more about Medicare Part B and Part D penalties, and when you should sign up
If you are interested in learning more about how your income can affect your Medicare Part B premium, Medicare.gov has a helpful chart.
Chris H.: What happens when I’m not working anymore and on a fixed income? I’m concerned Medicare could still stretch my budget. How can I make sure I can afford my Medicare coverage?
Frankie S.: You should check to see if you qualify for help paying for your Medicare benefits. There are several different savings programs that can help pay for some of the Medicare costs if you qualify based on your income and your assets. Some of these low-income benefits can help you pay your premiums. There are other benefits that can help you with the cost of your prescription drugs.
Learn more about financial assistance programs that can help pay for your Medicare costs
Selecting the right Medicare coverage means going with a plan that fits your entire lifestyle, not just your health care needs.
Chris H.: What if I’m pretty healthy right now? Can’t I save some money by just going without Medicare coverage for a while?
Frankie S.: Well, like I mentioned earlier, if you don’t have other group coverage, the longer you wait to enroll in Medicare Part B and Part D, the more you could pay. It’s a penalty you may be charged for enrolling late.
But even if you aren’t subject to a penalty, it’s still a good idea to enroll in Medicare instead of trying to go without Medicare coverage. You should also check to see if there are Medicare Advantage Part C plans available where you live. You’ll still have to pay the Part B premium. But you’ll get protection against any unexpected health problems because the plans come with a limit on the amount you pay in a year for covered medical expenses.
Chris H.: It’s good to remember that there could be Medicare late enrollment penalties. And helpful to know that Medicare Advantage plans may be an option. But how can I handle things like copays that can add up if I’m seeing a doctor a lot?
Frankie S.: If you opt for Original Medicare, you could think about getting a Medicare Supplement plan to help with some of these expenses. You’ll pay a monthly premium for your plan, but you’ll get help paying for things like copays. The premium might seem expensive, but if you use a lot of services, like frequent doctor visits or regular medical procedures, you could save money by adding a Medicare Supplement plan to your Original Medicare coverage.
It’s important to keep in mind that you can’t have a Medicare Supplement plan and a Medicare Advantage plan at the same time. You can choose one or the other. When people ask me how to make the decision, I always say, “Do the math.” My golden rule? Make sure the cost of the Medicare premium fits in your budget.
Learn more about Medicare Supplement plans
Learn more about how to enroll in Medicare
Chris H.: That’s a great tip. Any other strategies for not busting my budget?
Frankie S.: If you have a Part D plan or a Medicare Advantage Part C plan that includes prescription drug coverage, check the details of your plan so you know which pharmacies are in your network. Some Medicare plans even have preferred pharmacies that may offer you lower costs on your prescription drugs. These are the things that can make a real difference in your health care budget.
Perhaps most importantly, don’t just think about what you might spend on health care. Think about your total budget. It’s not like health exists in a vacuum. Your health is also about what happens to you outside the clinic or the hospital. Do a benefits check once a year by going to BenefitsCheckUp.org to see what type of local or federal programs you qualify for. Maybe you qualify for help paying your heat or electricity. Maybe you qualify for help with the cost of food. These things are just as important to your health as a visit to a doctor.
Chris H.: Good point. It’s so true that our health is impacted by a range of factors.
Frankie S.: Yes. Never stop thinking about your whole health. And keep in mind that you can also learn more about the types of help you qualify for by contacting your health insurance provider. Some representatives even have special training to help you find services that go beyond what you might think of as health care. For example, we have representatives look at the whole you and can connect you with resources to help you find everything from the best nursing homes in your area to the best air conditioning repair service. After all, your goals aren’t just about your health, your goals should be about your life.
Commonly asked questions about planning for Medicare costs
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Medicare Savings Programs help cover certain Medicare costs if your income and resources meet eligibility requirements. These programs may help pay premiums, deductibles or other out-of-pocket costs depending on the program you qualify for. Contact your state Medicaid office or review available programs to see if you are eligible for assistance.
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You can reduce Medicare costs by enrolling on time, choosing a plan that fits your needs and reviewing your coverage each year. Compare premiums, copays and provider networks to understand your total costs. You can also explore financial assistance programs that may help lower your expenses.
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Review your current coverage and compare other Medicare Advantage or prescription drug plans available in your area. Look at total costs, including premiums, copays and out-of-pocket limits, to find a plan that better fits your budget. You may also check if you qualify for programs that help reduce Medicare costs.
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Some Medicare Advantage plans may offer low or no copays for certain services, but costs vary by plan and location. Review plan details to understand what services are covered and what you may pay. Compare options in your area to find a plan that aligns with your health care needs and budget.
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Some Medicare Advantage plans include extra benefits such as vision and hearing coverage, but benefits and costs vary by plan. Review coverage details to see what services are included and what you may pay for glasses or hearing aids. Compare plans in your area to find an option that balances benefits and cost.
