Three Vital Tips To Save Money On Your Medicare Premiums
Medicare offers phenomenal healthcare benefits, but the sign up process can be confusing and the number of options available overwhelming. Understanding many of Medicare's details is important to make the best plan choices. Perhaps more importantly, learning which options are available and shopping around can result in significant premium savings. While most combinations of Medicare plans will provide excellent coverage, not all options provide the same benefits and premium costs can vary by hundreds of dollars. Be sure to follow these important tips to get the best deal possible when enrolling in Medicare.
1. Avoid Late Enrollment Penalties
Most people will receive Medicare Part A coverage without paying a premium, but if you are not eligible for premium-free Part A coverage and you do not elect to purchase it when available your premiums may increase by up to 10% once you enroll. This penalty will continue to be assessed for twice the period that you were eligible to enroll but chose not to. While most people will have to pay premiums for Part B, a similar 10% penalty is assessed if you choose not to enroll once eligible and then enroll later. Unlike with Part A, this premium penalty will apply for as long as you have Part B coverage. These fees can potentially cost thousands of dollars over the course of your coverage period.
2. Consider Medicare Advantage
Medicare coverage currently takes one of two forms: Original Medicare or Medicare Advantage. Advantage is private insurance, often administered in a similar fashion to an HMO or PPO, that takes the place of Original Medicare. If you opt for a Medicare Advantage plan you will potentially pay lower premiums, but coverage between Advantage plans is not guaranteed to be the same and Advantage plan networks are potentially much smaller. The upside is that Advantage plans are often drastically cheaper than Part A and Part B premiums. Carefully compare the Advantage plans available to determine if they provide suitable coverage at a better cost than Original Medicare.
3. Take Advantage of the Open Enrollment Period to Shop Around
According to AARP, you have many options to alter or change your Medicare coverage during the open enrollment period. This period runs from October 15th to December 7th each year. During this time, you can switch your coverage from Original Medicare to a Medicare Advantage plan or vice versa. While this option is open to you, or before your coverage begins for the first time, you can shop around for cheaper plans to realize potentially large premium savings. If you are using or plan to use a Medicare Advantage plan, this is the time compare coverage, networks, and premiums to find one that works best for you. This is also a good time to compare Medicare Part D plans if you are opting to stick with Original Medicare.
The key to getting the best Medicare coverage possible while keeping your premiums to a minimum is simply being prepared and knowledgeable. Knowing when the late enrollment fees go into effect, being aware of Medicare Advantage plans, and shopping around can potentially save you hundreds of dollars every month. If in doubt, the U.S. Centers for Medicare and Medicaid Services provide a detailed Medicare cost breakdown.