Going without health insurance at any age can be a dangerous thing. This especially holds true in retirement. That’s because health problems have a tendency to arise with age. And without health coverage, you risk wiping out your nest egg to pay your expenses.
Thankfully, older Americans don’t have to go without coverage, because starting at age 65, most seniors are eligible to sign up for Medicare. A new report by TIAA, however, reveals that only 34% of current retirees understand how much of their medical expenses Medicare will cover.
If you’re gearing up to enroll in Medicare, or if you’ve recently signed up, it’s important to know what to expect from the program. Here are some key things to know about Medicare.
1. There are costs involved
One big Medicare misconception is that enrollment in the program is free. That’s only true for Part A, generally speaking, which covers hospital care. Part B, however, which covers outpatient care, charges a monthly premium.
This year, the standard monthly Part B premium is $174.70. However, higher earners pay more.
There’s also Part D, which covers prescription drugs. You’ll need Medicare Part D in conjunction with Parts A and B, and the cost there will depend on the plan you choose, as well as your income.
Aside from premiums, there’s cost-sharing with Medicare. You’ll be liable for a deductible under Part A if you’re admitted for a hospital stay, you’ll face an annual deductible and coinsurance costs for services provided under Part B, and you’ll be looking at copays for medication. Make sure you’re prepared for these costs so they don’t throw your finances out of whack.
2. Not everything is covered
Medicare covers a lot of different treatments and services — but it won’t cover everything. If you need routine dental care, that’s not a covered service. Neither are eye exams or hearing aids.
You should also know that Medicare will not cover the cost of long-term care. If you need to enter an assisted living facility or nursing home, or you end up requiring the help of a home health aide, those expenses will be on you.
3. There are certain services you can get for free
While there are plenty of expenses to grapple with as a Medicare enrollee, you’re also entitled to a number of free services you may want to take advantage of. Certain vaccines, for instance, are available to Medicare participants at no cost. And you’re generally entitled to a yearly well visit, too.
Some screening tests may also be available to you at no out-of-pocket cost. It’s important to review your benefits carefully once you sign up.
Medicare is a complex program, so it’s not completely shocking to learn that many older Americans don’t really know what to expect from it. But it’s essential that you take the time to read up on Medicare. It could spare you a world of financial stress — and also help ensure that you’re benefiting from the perks that come along with being enrolled.