MEDICARE: What You Don’t Know Can Hurt You

People over the age of 65 can enjoy Medicare benefits, after paying various Medicare taxes.

Most people aren’t aware that there are multiple parts of Medicare. You should know about each part to avoid overpaying. Any mistake can lead to you paying penalties that could last throughout your retirement years.

The official U.S government Medicare handbook is 120 pages long. In this article, we’ve tried to cover basic details from the handbook and explain the various penalties of Medicare.

Medicare Parts A, B, C And D

Medicare is separated into 4 parts – A, B, C, and D.

Medicare Part A covers the hospital Insurance that includes care in hospitals, nursing facilities, and home health care.

Medicare B covers services from doctors, health care providers, and many preventive services.

Medicare D covers most of the prescription drugs.

Medicare C is also known as Medicare Advantage, which includes most parts of Part A & B, and even includes Part D. But the main difference is that it is provided by private insurance companies that offer PPO, Private Fee for Service Plans, and Medical Savings Accounts. You can either choose the original Medicare (A, B, D) or just Medicare Advantage.

Medicare Part B Penalty

If you do not choose Part B, which is outpatient coverage, when you enroll with Part A, then you may have to pay a late enrollment fee for the rest of your life.

Part B cost coverage is based on the income level and how you file your tax return. Joint tax return with an income of $170,000 or less will entitle you to $135.50 Part B premium.

But if you delay Part B by a year, you might have to pay a 10% penalty, and the premium increases over time as well.

Medicare Part D Penalty

Delaying your Part D coverage can lead to an annual penalty. Each year you delay, the penalty is calculated by multiplying 1% of the national base beneficiary premium that came up to $33.19 in 2019.

You never know the exact penalty that you will pay for the rest of your life. The base beneficiary premium changes every year. If you live for a long time and with 25 years of penalty, you may be paying more than thousands of dollars per year.

Review Your Part D And Medicare Advantage Policy Annually

Each year, costs and coverages for Part D and Medicare Advantage plans change. You need to review them to ensure you’re not overpaying for the plan.

You can also look for other plans that offer better coverage and services. Many forget to check their costs and coverages and end up paying more than necessary.

Medicare is quite complex and challenging to understand, so you are not alone if you have a lot of questions. You can approach an expert and get your doubts clarified.