Weekend Reading: Democratic Lawmakers Want to Expand Medicare. Here Are the Gaps in Coverage and Other Costs to Know

Posted: 08/27/2021

|CNBC |Healthcare |Medicare

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.

Weekend Reading

Here’s a shocker for many pre-retirees: Medicare isn’t free. Not only that, but it can often come along with unexpected costs.

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This is why understanding how the program works sooner – rather than later – can make all the difference in saving your hard-earned dollars.

What’s covered? As part of their $3.5 trillion budget plan, Democratic lawmakers in congress are proposing an expansion to Medicare so that it includes dental, vision and hearing needs. These aren’t the only exclusions from current Medicare coverage, and often times, even when there is coverage, you could still potentially face out-of-pocket expenses.

At present, basic Medicare includes Part A (hospital coverage) and Part B (outpatient care), while Part D (prescription drug coverage) is optional. Many beneficiaries opt to receive Parts A and B benefits through Advantage Plans (Part C), which are offered through private insurers. Other beneficiaries choose basic Medicare and pair it with a standalone Part D plan. Either way, missing your enrollment period to sign up for Medicare (based around your 65^th birthday), results in a 10 percent higher monthly base B premium for every 12-month period you should have been enrolled. To mitigate for any out-of-pocket expenses not covered by Medicare, individuals can utilize a Medigap policy.

Costs to consider: A minimum 10-year working history of paying into the system means you face no premium for Part A coverage. However, if you have no additional insurance to account for out-of-pocket expenses, the 2021 deductible for Part A is $1,484. The current standard Part B monthly premium is $148.50, but this cost also increases for beneficiaries with higher incomes. When it comes to Advantage Plans and Medigap plans, premiums can also vary greatly – and, it’s important to keep in mind that Medicare also doesn’t cover long-term care. These costs accumulate, and can often be confusing, which is why partnering with a trusted professional who knows the ropes is so important.

Stay tuned: Dental, vision and hearing coverage has been a huge pain point for many retirees, including my own mother. Hopefully, this common-sense gap can be efficiently filled with minimal impact.

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