Tuesday, August 28, 2012

What to Expect from Your Medicare Paycheck Deduction

Whenever we look at our paycheck stubs, we usually find one or more deductions reducing our bottom line. One of those deductions is for the Medicare program. While we’re able to see what that amount is on every paycheck, we don’t exactly see an explanation into what it buys. In the interest of learning a little bit more about our paychecks, let’s take a look at what we can expect from a modest investment into the program.

Individuals become eligible for Medicare benefits when they turn 65 years of age or have certain disabilities. The plan is split up into four parts:

-         A – Hospital Insurance. Includes qualified care in hospitals, inpatient care, hospice care, and home health care.
-         B – Medical Insurance. Includes medically necessary and preventative services.
-         C – Advantage Plan offered by private companies. Wraps up Medicare parts A, B and possibly D plus additional services depending on the provider.
-         D – Prescription drug coverage.

Most individuals receive benefits from part A when they become eligible for Medicare without paying a monthly premium for the coverage. Part’s B through D do come with monthly premiums that can vary depending on a variety of factors. You can find out more information on the different parts through the Medicare.gov website.

The enrollment period for Medicare begins three months before you turn 65 and ends three months after. If you miss the window, you can still sign up for coverage from January 1 through March 31 each year, but you may end up paying a higher premium for late enrollment. Be sure to keep this information in your back pocket to avoid missing the window.

What do you think of the Medicare program?

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