On average, Medicare beneficiaries spend about 41 percent of their income on out-of-pocket medical expenses. That number is expected to rise to 50 percent by the year 2030. When you’re living on a fixed income, you want to make every penny count. If you’re looking for ways to reduce your Medicare costs, here are six ways to do so.
1. Understand the different parts of Medicare
Medicare is made up of four different parts. Part A covers hospital insurance, Part B is medical insurance, Part C is Medicare Advantage, and Part D is prescription drug coverage. Another important part of Medicare coverage is Medigap, or Medicare supplemental insurance. When you know how the different parts work, you can find the best plans that suit your healthcare needs. Be sure to follow the Medicare World Facebook page for all your Medicare education needs.
2. Consider a Medigap policy
If you have a chronic illness that requires recurring doctor visits, a Medigap policy can help you cover some of the out-of-pocket Medicare costs like copays and deductibles. Please note: you may not purchase a Medigap policy if you have Medicare Advantage; only those who have Original Medicare are eligible for Medigap. If you have a pre-existing condition, you may be denied coverage or have a waiting period before your coverage begins. Compare Medigap policies side-by-side.
3. Compare prescription drug plans
You can get prescription drug coverage several ways with Medicare: through a stand-alone Part D plan, through some Medicare Advantage plans, and some Medigap policies offer prescription drug coverage as well. Each drug plan has a formulary, or list of covered drugs. If you want to cut down on Medicare costs, use Medicare’s plan finder to find plans that covers your specific prescription drugs.
4. Talk to your doctor about cutting costs
Reducing your Medicare costs could be as simple as asking your doctor if there is a cheaper, generic alternative of your medication. According to Duke University, patients only talk to their doctor about healthcare costs about 30 percent of the time. If you come to your doctor with your healthcare cost concerns, they might be able to help you strategize in a way that reduces your out-of-pocket costs. You can also talk to the doctor’s or hospital’s billing department
5. Stay healthy
Staying healthy is one of the best ways to cut down on your Medicare costs. This means eating a healthy diet, getting about 150 minutes of exercise every week, and seeing your doctor for all of your preventative care needs. If you maintain a healthy lifestyle, it stands to reason that you will need to see your doctor fewer times per year. Some Medicare Advantage plans will even cover the cost of a gym membership through a program called SilverSneakers.
6. Invest in a Roth IRA
Investing in a Roth IRA early and often is the best way to save money with Medicare. If you are an individual who makes more than $85,000 per year or a couple that earns more than $170,000, you will likely be hit with a surcharge and pay higher Part B and Part D premiums. However, a Roth IRA might be a loophole out of that surcharge. Because Medicare doesn’t view Roth IRA withdrawals as income, you can pad your income with funds from your Roth IRA without getting hit with higher premiums.