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9 Pro Tips for Medicare Coverage and Out of Pocket Costs

Medicare is making it easier for enrollees to compare out-of-pocket costs between different plan options.                         

That’s a good thing, as costs can really add up for Medicare enrollees. According to a recent study by Kaiser Family Foundation, Medicare enrollees spent 41 percent of their Social Security income on medical care in 2013, and that percentage is expected to rise to 50% by 2030.

Additionally, a separate study by the Commonwealth Fund shows that Medicare beneficiaries shell out $3,024, on average, for annual out of pocket Medicare costs. 

That’s why it’s vital that Medicare recipients take some much-needed shortcuts to ensure they’re getting the best out-of-pocket cost deals on their Medicare coverage. 

Medicare does offer some direct aid on curbing out-of-pocket health care costs for program enrollees. Still, there are other moves Medicare enrollees can make to keep more cash in their pocket, and less in a health care provider’s pocket, when using government-run health care in 2019.

Even more savings are available to seniors who shop around for the most affordable Medicare suppelement plan on the market.

9 pro tips to mitigate out-of-pocket expenses

Try these 9 tips to get the most out of Medicare.

1. Know where you stand. According to Medicare, avoiding out-of-pocket spending isn’t feasible –you’re going to spend some cash, even after covering your monthly payment premium. The amount you spend will depend on the following impactors: 

  • Where you live (that’s why Medicare wants a zip code to use their out-of-pocket estimator listed above.) 
  • The exact Medicare coverage you have. 
  • Your own unique medical care requirements. 
  • The amount of prescription drugs you use (and pay for). 
  • How often you require professional health care services. 

2. Sign up for Medicare program updates and tips. Medicare offers regular posts and tips on better managing your entire Medicare experience, including paying for out-of-pocket costs. Sign up for Medicare’s email update list.

3. Leverage the calendar. Shop your Part D prescription drug coverage every year during the annual election period (AEP), advises Keith Murray, an independent agent working in the Medicare market for the past 22 years. “This mostly applies to those on original Medicare with a stand-alone drug plan.” Even if you love your plan, note that every plan has changes in premium, deductibles, and formularies (the list of covered drugs and which tier they fall under) from year to year. “Make sure you are on the best plan based on the drugs you are taking, not based only on the monthly premium,” Murray says. 

4. Get a 90-day supply when having your prescriptions filled. “If you get a 30-day supply, you’ll have a co-pay for each prescription that is filled every month,” says Murray. “When you get a 90-day supply, you will only pay the equivalent of two months' co-pay. So, if your 30-day supply has a $30 co-pay, a 90-day supply will cost you $60.” 

5. Adjust your income. Above certain income thresholds, the premium for Medicare Part B and Medicare Part D goes up, says Mike Piershale, ChFC, and president of Piershale Financial Group, in Barrington, Il.If you’re a little above the threshold, you can reduce your adjusted gross income below that threshold, which will cause your premium to drop,” Piershale says. For example, a married couple filing jointly will pay $53.50 per month extra ($642 per year) on their Medicare Part B premium, if their modified adjusted gross income is above $170,000. “If they can get below the threshold, however, they can save that $642 for the year,” he adds. Income adjusting can be executed by sheltering income in IRAs or annuities, by buying growth stocks that pay less income, or eliminating the tax on required minimum distributions by taking them as a qualified charitable donation, Piershale says. 

6. Factor in the intangibles. Don’t jump into a Medicare Part C Advantage plan just because the benefits have a lower cost than original Medicare (Medicare Part A and Part B). “Be sure you can live with the fact that Medicare Part C plans require you to only see in-network doctors and you also need a referral before you can go see a specialist,” Piershale advises. 

7. Condense your lab work into a single day. Most Medicare Advantage plans charge a co-pay of about $30 per lab, says Eric Kossian, underwriting specialist and agency principal at InsurePro, in Washington state. “However, if you do all your lab work in the same day, most Medicare Advantage carriers will only make you pay one co-pay,” Kossian says.

8. Shop wisely for prescription drug plans. Medicare Advantage plans, while they usually do include prescription drugs, typically only have one drug to choose from. “Consequently, if you’re on a lot of prescription drugs, you may actually save hundreds of dollars a month with a standalone drug plan in combination with a Medicare Supplement plan,” says Kossian. “Under that scenario, you’ll have about 20 different drug plans to choose from.”

9. In good health? Go for a higher deductible. If you’re in good health and your medical costs are few and far between, a high-deductible Medicare Plan F supplement might be your cash-saving best option. “This plan offers the same benefits as a standard plan, but its monthly premiums are significantly lower,” says Ruth Linden, Ph.D. and founder and president of Tree of Life Health Advocates in San Francisco. The catch is that you’ll need to pay all costs for Medicare-covered services until you reach your annual deductible, says Linden. “But few people actually reach their deductible, because they will pay out of pocket for only 20% of their Medicare-allowable charges,” she notes. 

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