Medicare open enrollment is next month, so for many Medicare recipients it’s that magic time of the year to start thinking about what, if any, changes you need to make to your coverage.

If you’re nearing the age of 65, however, there is probably a lot you may not know about Medicare. And one of those things is that it’s not free.

After paying into Medicare through payroll withholdings at work for many years, some people approach their eligibility at age of 65 with a misconception that the coverage will be free.

The “Medicare for all“ conversation in the media isn’t helping either and might be contributing to some confusion because when many consumers hear that they hear the word “free.”

In reality, Medicare comes with a variety of expenses, including premiums, co-pays and deductibles. High-earners pay more for certain premiums, and there’s no out-of-pocket maximum.

Many people to whom we talk at the Area Agency on Aging are surprised, sometimes completely shocked, that they have to pay anything for Medicare.

The existing Medicare system begins costing you the minute you enroll. And if you fail to sign up on time you could pay a life-lasting penalty.

And that’s just a starting point. There are many things that are not covered by Medicare, including dental, basic vision, over-the-counter medicines and long-term care.

People just starting this process really need to make figuring out their Medicare coverage a key part of managing their expenses.

Here’s what you need to know

As long as you’ve had at least a 10-year work history, you pay no premiums for Medicare part A, which covers hospital stays, skilled nursing, hospice and some home health services.

Medicare Part B is a different story. This part of Medicare covers outpatient care and medical supplies and has a standard monthly premium of $135.50 (higher earners may pay more). Medicare part B also comes with a $185 deductible. After that’s met you typically pay 20% of covered services.

If you fail to sign up for Medicare when you first qualify for coverage and you change your mind later, you could face life-lasting penalties that would make your monthly premium higher.

Some people with low incomes qualify for programs that reduce Medicare-related costs. For example, the extra help program can assist with Medicare part D premiums as well as out-of-pocket costs on drugs at the pharmacy. The Medicare Savings Program in your state can help with co-pays, coinsurance, deductibles and premiums (if you qualify financially).

Just remember, Medicare part A and B do not cover prescriptions. That’s where a Part D drug plan comes into play.

You can get a standalone plan to use alongside original Medicare, or you can sign up for an advantage plan which is also called Medicare Part C. These plans typically include prescription drug coverage. If you go this route, your Medicare Part A and B benefits will be delivered through the insurance company offering the advantage plan.

The average cost for Part D coverage in 2019 is around $32 per month, according to the Centers for Medicare and Medicaid services. Unfortunately the deductible for 2019 on many of these plans is $415, which must be met before the plan will pay out any benefits.

Long story short, it’s a complicated process. If you have any questions or are currently on Medicare and would like to apply for any of the assistance programs I mentioned above please give me a call at 417-781-7562.

ALLISON RIDDLE is the community services director for AAAX.

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