Medicare provides healthcare for about 45 million U.S. citizens and residents. Most Medicare enrollees are 65 years old or older and live on fixed incomes. Every dollar counts in the high-cost healthcare market. Here are five tips that can reduce your medical bills when you use Medicare.
Purchase a Medigap Plan. Medicare consists of parts. Part A covers hospital stays while Part B covers trips to the doctor’s office. Part A and B are referred to as “Original Medicare”. Economic and political pressures, however, have created numerous loopholes. These loopholes include how much a service is covered and for how long. For example, most doctors’ bills are only covered for 80% of the approved amount (i.e. the amount Medicare says it will pay). Purchasing Medigap insurance will help you cover up these holes in Original Medicare. You will have to pay a monthly premium but the amount saved in comparison to Original Medicare could make Medigap a winning proposition.
Go to Medicare assigned doctors. All medical providers that receive Medicare must be certified by the Centers for Medicare and Medicaid Services. Before setting up your doctor appointment, talk to the billing manager and ask if the doctor is Medicare assigned. Another way Medicare reduces cost by requiring doctors who apply for Medicare certification to accept limits on how much Medicare will pay. This is called the “approved amount”. Even with this concession, Medicare only covers 80% of the approved amount. If your doctor is “assigned, however, then he will bill only for the 80% of the approved amount. This means there will be no out-of-pocket costs for the patient. This help save a lot of money.
Use home health care after the hospital. Medicare Part A covers hospital visits without any cost to the patient for the first 60 days. From 60 to 90 days the patient will be charged a daily coinsurance which can be hundreds of dollars. After the 90 days the patient will be responsible for all hospital costs. What makes this tricky is that Medicare does not require the 90 days to be back to back. If the patient is hospitalized for 30 days, gets out for a few weeks, and then goes back in for another 30 days then Medicare will add them together. Now the patient has 60 days and will be required to pay coinsurance from then on. The only way to start the clock over is to stay out of the hospital for 60 back to back days. Once 60 days has elapsed the “benefit period” has ended. You can avoid the coinsurance by leaving the hospital and receiving home health care for 60 days allowing the benefits period to elapse. That way if you have to enter the hospital again you will not have to pay expensive coinsurance.
Avoid the enrollment penalties. If you do no enroll in either Part A, B, or D when you become eligible and later decide to enroll then you will be charged a penalty. Everybody 65 years of age and who has earned a sufficient number of Social Security work credits is automatically enrolled into Medicare Part A. You will have to enroll in Medicare Part A yourself if you do not qualify by age or work credit. Enrollment in Part B is not automatic. You must apply for it at your local Social Security Administration office. The same goes for Medicare Part D, the government-run prescription drug plan. You can enroll in Medicare within seven months of becoming 65 years old. If you do not enroll during the initial enrollment then you will have to enroll during general enrollment between January 1 and March 31. If you enroll during the general period instead of when you turn 65 you will be required to pay higher premiums. For example, if you enroll in Medicare Part B during a general period your premium will be 10% more for every year of eligibility. So if you waited five years after turning 65 to enroll you’d pay 50% more in premiums. This is a costly and avoidable mistake, hence the quickest you get Medicare enrollment out of the way the better off you are in the long run.
All of these tips require you to be proactive. Though in the short-term it will mean more work on your end. In the long-term you will be relieved to save your money especially since every dollar counts in retirement.
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