Have you ever tried to do Medicare budget planning? If so, you know it’s no easy task. From managing premiums and deductibles to accounting for unexpected expenses, there are tons of steps to consider. In this blog, we’ll cover the different factors that contribute to effective Medicare cost management. We’ll also share how our Medicare Advisors at Wandacare can help you build the best budget possible.
Understanding Medicare Costs and Coverage Options
Before you can plan a Medicare budget, you need to understand your expenses. Here are the key costs associated with Medicare:
- Premiums: These are the monthly payments required to maintain your Medicare coverage. There are two main types of premiums: Part A premiums (for hospital-related coverage) and Part B premiums (for outpatient medical services). If you’ve worked and paid Medicare taxes, you may get premium-free Part A coverage. However, Part B typically has a standard premium that can vary based on income.
- Deductibles: A deductible is the amount you pay out of pocket before Medicare begins covering certain services. Part A deductibles apply for each benefit period, which starts at hospital admission and ends once you’ve been out of the hospital for 60 consecutive days. Part B, meanwhile, has an annual deductible.
- Co-payments and Coinsurance: After meeting deductibles, you’ll often share costs through co-payments (a flat fee per service) or coinsurance (a percentage of the service cost). For Part B services, you usually pay 20% of the approved service costs.
If you want coverage for prescription drugs, you’ll need to add Part D (which is a separate Medicare drug plan).
Exploring and Budgeting for Medicare Advantage Plans
While some people rely on traditional Medicare plans, others utilize Medicare Advantage plans. Also known as Part C, these plans are offered by Medicare-approved private insurance companies. They include all the benefits of Part A and Part B, as well as additional perks such as prescription drug (Part D) coverage.
Many Medicare Advantage plans offer low or $0 premiums for Plan A services (although you’ll still need to pay Part B premiums, co-payments and coinsurance). However, unlike traditional Medicare, Plan C has a yearly limit on out-of-pocket costs. Once you reach this limit, you don’t have to pay for covered services for the rest of the year.
Maximizing Savings: How to Take Advantage of Medicare Programs
If you’re worried about meeting your Medicare costs, there are programs that can help. Many people receive financial assistance through the following resources:
- Medicare Savings Programs (MSPs): MSPs are state-run programs designed for individuals whose income and resources fall below a certain amount. There are four main types:
- Qualified Medicare Beneficiary (QMB): Covers Part A and Part B premiums, deductibles, co-payment and coinsurance
- Specified Low-Income Medicare Beneficiary (SLMB): Covers Part B premiums
- Qualifying Individual (QI): Covers Part B premiums
- Qualified Disabled and Working Individual (QDWI): Covers Part A premiums for disabled individuals who are under 65 and lost coverage because they’ve returned to work
- Extra Help: This federal program helps reduce costs for Part D prescription drug plans.
- State Pharmaceutical Assistance Programs (SPAPs): Depending on your location, your state may offer financial assistance for Medicare Part D.
To determine eligibility for MSPs or other services, you’ll need to submit an application. Our Medicare advisors at Wandacare can help you apply and get the coverage you deserve.
Preparing for Unexpected Healthcare Costs
No matter how much you plan ahead, there’s always the chance that something unpredictable will happen. To protect yourself from sudden financial strain, it’s important to account for any unexpected healthcare costs. Here are some top ways to stay prepared:
- Make an Emergency Fund: Have you ever set up a rainy day fund? Consider making an emergency fund specifically for unexpected health care costs. This way, you’ll be able to pay for services that aren’t covered by your Medicare.
- Buy a Medigap Policy: Also known as Medicare Supplement Insurance, Medigap helps traditional Medicare users cover out-of-pocket costs. You can purchase Medigap from a private health insurance company.
- Use Preventive Services: Medicare includes preventive screenings designed to catch health issues early on. By utilizing these services, you can help prevent larger (and more costly) problems from occurring.
Need support with your Medicare budget planning? The Medicare advisors at Wandacare are here to help.
Contact Wandacare and Create a Realistic Medicare Budget for the Year
Proper Medicare cost management is easier said than done. The good news is, you don’t have to navigate the process alone. At Wandacare, we offer experienced advisors who can assist with your Medicare decision-making. Whether you need help organizing current costs, signing up for savings programs or planning an emergency fund, our experts have you covered. Schedule a consultation today to start setting your budget!
