Speaker 1: Hi, I'm Stacey Hyde and I'm back for another episode
of Better Financial Health in 15 Minutes or Less, and today's
topic is going to be geared toward those of our listeners
who are a little bit older either early retirees or
soon-to-be retirees that are looking toward Medicare, and the
reason they are is they're like my medical insurance will
finally be free.
I've been paying into Medicare all these years and now I won't
have to pay for it.
Well, that's not exactly true, and also people get confused
because there's so many different parts of Medicare.
Medicare Part A is free for most people because you've paid
into it over time and that covers hospital stays and bills,
but there is a deductible of $1,600 per hospital stay.
And then you have Part B.
This is your doctors, your medical tests, things of that
nature.
It has a premium of just under $175 a month, so definitely not
free.
And then there's also all sorts of co-pays and out-of-pockets
depending on what you're doing that are set by Medicare Too
many to go into.
Medicaregov is a great site.
I would encourage you, if you're looking for information
on Medicare, to actually type that into your browser
Medicaregov.
That way you know you're not on some other site, because a lot
of sites try to spoof that.
So I think you're safer, rather than doing a Google search,
just type that into your browser's address bar and get
the real thing and it'll show you exactly what your
responsibilities are.
And then part D is drugs.
Well, you might say, stacy, you skipped C.
What is C?
Part C is Medicare Advantage.
Those are the all-in-one plans where you still have to pay your
Part B premiums, but it groups together your A, b and your D.
The difference between that and traditional Medicare is the
insurance company creates a network of doctors that may or
may not include your doctor, so it's more similar to what you're
used to when you're employed.
As far as being limited to you know one hospital system versus
another.
Certain doctors groups are included, certain ones are not.
They also tend to be very location specific and have
limited benefits outside of your particular area.
They got real popular for a while because the insurance
companies were making a lot of money on them, and so they
started offering vision benefits and some dental benefits and
things of that nature.
As I've said here on the podcast before, not really a fan
of them.
And then there's also, if you have traditional Medicare and
you have A, b and D, you're.
We also recommend that you have a supplement plan, and what the
supplement does is it steps in and pays those out-of-pocket
co-pays the $1,600 that we talked about for hospital stay,
the other testing co-pays, that sort of thing and those run
about $150 a month, depending on your age and whether you got it
during your initial enrollment period.
So then you have obviously your premiums that we talked about.
You'll have your Part B deductible, which is rents in
the low 200s.
But if you have a Plan G supplement, most everything will
be covered after that.
So, adding that up, you're looking at about $400 a month
per person for just the premiums and then you have the Part B
deductible and then you have any drug cost.
But what a lot of people miss are if your income is over as a
married couple, over about $213,000, over as a married
couple of over about $213,000, not your taxable income but the
big adjusted gross income on your tax return you have to pay
higher Medicare premiums and they can be substantially higher
, you know, four times the base premium, which can really add up
for a couple.
Also, dental and vision and hearing are generally not
covered.
Some Medicare supplements will have limited dental.
They may cover cleanings and they may offer some discounts
for vision.
I will say for the plans that I've looked at the dental and
vision plans they don't make a lot of sense because you're
paying in premium essentially almost what the maximum that the
policy would cover anyway.
You're better off talking to your dentist, particularly if
you've been going to that dentist for a long time and
saying, hey, I don't have dental insurance anymore.
If I agree to pay you, you know , at the time of service you
don't have to chase me for a bill Will you give me the same
discounts that you were giving my insurance company?
And most of the time they will, because they're happy to not
have to deal with the insurance company.
And then for vision, you know you can go to the Costco or the
Walmart.
I've had great personal experience with Costco Vision
Center, great pricing there.
But I still go to my long-time optometrist for my exams and
that sort of thing.
And then you've got inflation and these premiums do go up
every year, both for Medicare, part B and your insurance.
So you need to plan for about $6,000 to $10,000 per year per
person, even in retirement on Medicare.
If you were fortunate enough to have a HSA during your working
years, guess what.
You can still pull money out of that and use it to offset these
costs, which is a big reason that we oftentimes tell people,
if they can afford it, let their HSA grow during their working
years and use it for these premiums in retirement.
And in many cases it makes sense to coordinate your Social
Security start date with your Medicare start date so that you
can have your Medicare premiums deducted from your Social
Security benefits.
So that would be starting at 65 versus 67.
If you don't want to start it then pulled out to get the
maximum benefit, then you will actually have to mail in your
Medicare Part B premiums on a quarterly basis.
They don't allow you to pay monthly.
You have to pay them quarterly.
So Medicare is not a free ride but it can be a pretty
predictable and you definitely don't have the assuming you have
traditional Medicare and a supplement.
You don't have the risk of huge out-of-pocket costs like you
used to have, especially now.
Some people would have large prescription drug costs, but now
those are capped at $2,000 a year currently.
So review your Medicare cost open enrollment for if you're
using Medicare Advantage open enrollment and if you have a
prescription drug plan which I hope you do both of those open
for enrollment in October and goes through.
I believe it's December 7th.
So it's important to go and look and make sure that, even if
you like your plan, to make sure that there's no changes
coming for this year, that the doctors haven't changed, the
networks haven't changed and some of the benefits haven't
changed, because what I'm reading is that some of the
insurance have dialed back some of the benefits.
So you really want to make sure you pay attention this year.
You don't just assume that everything's going to be okay.
So happy shopping for Medicare.
It is a great program, but you definitely need to pay attention
to the details.
Thanks for tuning in.
This has been another episode of Better Financial Health in 15
Minutes or Less.