How to save on Medicare costs

What are the biggest factors affecting the cost of Medicare coverage?

The type of coverage and the plan a Medicare-eligible person chooses are the biggest factors that will affect the cost of their Medicare coverage. If they don’t have group coverage through an employer or union, they should sign up for Medicare Parts A and B, as well as a Part D plan, as soon as they’re eligible. Signing up late for Part B or Part D may result in paying a penalty.

There are two main ways to get Medicare coverage.

Original Medicare (Part A & Part B)

• Administered by the federal government, Original Medicare consists of Part A (hospital insurance) and Part B (medical insurance).
• Those Medicare-eligible can join a separate Medicare drug plan to get Medicare drug coverage (Part D).
• To help pay out-of-pocket costs in Original Medicare (like the 20 percent coinsurance), individuals can also shop for and buy Medicare Supplement Insurance (Medigap).

Medicare Advantage (Part C)

• These are Medicare-approved plans offered by private companies. They offer an alternative to Original Medicare for health and drug coverage. They must follow rules set by Medicare.
• These “bundled” plans include Part A and Part B and usually Part D.
• When a Medicare member joins a Medicare Advantage Plan, they’ll still have Medicare but will get most of their Part A and Part B coverage from the Medicare Advantage Plan, not Original Medicare.

Can I afford Medicare coverage on my income?

Yes. There are several different financial assistance programs available to people who qualify, based on income and asset requirements. These programs are designed to help people pay premiums, deductibles, copayments, coinsurance and even for prescription drugs.

Programs include:

• Medicare Savings Programs — help from an individual’s state to pay their Medicare Part A and Part B premiums, deductibles, copayments and coinsurance. Individuals apply through their state. Their state determines which program(s) they qualify for. In many cases, to qualify for a Medicare Savings Program, a person must have income and resources below a certain limit. These limits go up each year. Even if a person doesn’t think they’ll qualify, they should still apply.
• Medicaid — provides health coverage to Americans, including eligible low-income adults, children, pregnant women, older adults and people with disabilities. Medicaid is administered and funded jointly by states and the federal government. Eligibility criteria vary from state to state. If a person is unsure if they qualify for Medicaid, they should apply. They might be eligible, depending on their household income, family size, age, disability and other factors.
• Extra Help — for those who qualify, it means Medicare helps pay their Medicare prescription drug coverage (Part D) monthly premium, any yearly deductible, coinsurance and copayments.
• Dual-Eligible Special Needs Plan (D-SNP) — is a type of Medicare Advantage Plan for people who qualify for both Medicare and state Medicaid assistance or Medicaid. D-SNPs often offer added benefits beyond what a person gets from Original Medicare and Medicaid. The added benefits can fill gaps in their care and improve their quality of life.

Can I save money by going without Medicare coverage for a while?

The longer an individual waits to enroll in Medicare Parts B and D, the more they could pay in late-enrollment penalties, especially if they don’t have other group coverage. Even if they aren’t subject to a penalty, it’s still a good idea to enroll instead of trying to go without coverage.

Medicare Advantage plans may also be an option to help protect against any unexpected health problems. Unlike Original Medicare, Medicare Advantage plans have a yearly limit on what members pay out-of-pocket for services Medicare Parts A and B cover. The out-of-pocket maximum varies by the Medicare Advantage Plan selected.

Are there other ways to save on prescription drug coverage?

Members who have a Part D plan or a Medicare Advantage plan that includes prescription drug coverage need to check which pharmacies are in their network. Some plans include preferred pharmacies that may offer lower prices on prescription drugs. If a member uses a pharmacy not included in the plan’s network, they may have to pay the full price of their prescriptions.

What else can I do to save on health care?

A person’s whole health includes far more than what happens inside a clinic or hospital. It’s important individuals check available benefits once a year to see what other types of local or federal programs they may qualify for. Contact your insurance provider to learn more about added services a Medicare Advantage Plan may offer.