When you are looking ahead toward your retirement years, the anticipation of Medicaid eligibility will be part of the equation. While it is comforting to know that you will have a reliable source of health insurance for the rest of your life, it is important to understand the limitations of the program.
Everyone does not automatically qualify for Medicare coverage by virtue of being an American citizen. While you are working, you pay FICA or self-employment taxes. These contributions are used to fund the program. If you work and pay these taxes consistently for at least ten years, you will qualify for Medicare when you reach the age of 65.Most people will satisfy this requirement on their own. This being stated, if you are married and your spouse has earned eligibility, you would be able to qualify for Medicare on their record.
With regard to the eligibility age, it is 65 at the time of this writing. Over the years, there have been legislative proposals that would raise the age in an effort to save money. This is a matter that you should monitor on an ongoing basis so you understand what to expect as your retirement years start to come into focus.
Medicare Comes in Four Distinct Parts
The Medicare program is broken up into four different sections: Part A, Part B, Part C, and Part D. Medicare Part A is the portion that pays for in-patient hospitalization. The majority of people do not have to pay a monthly premium for this coverage, but there is a deductible per benefit period. This is adjusted annually, so we are not going to share the exact figure that is in place at this moment, but it is in the vicinity of $1,400. If you are in the hospital for more than 60 days, there are significant coinsurance payments that must be made (well over $300 per day). Once you reach day 91, the daily co-insurance you must pay out-of-pocket is in the $700 a day range (for a maximum of 60 days over your lifetime). Beyond that, you have to pay the entire costs yourself if you are ever in that situation.
Medicare Part B covers outpatient treatments and visits to doctors. You must pay a monthly premium for the coverage, but it is modest at less than $150. There is also an annual deductible that is just under $200. The big hit with this portion of the coverage is the fact that Medicare will only pay 80% of covered costs, and you have to pay the other 20%.Part D is the program component that covers prescription drugs. There are premiums, co-payments, and deductibles for this coverage, and it varies depending on the exact plan that you choose.Part C is alternately referred to as the Medicare Advantage. It allows you to use your benefit to purchase private insurance that fills in some of the gaps in the Medicare program. There are many different options available, so it takes a good bit of research to digest the information that you need to make a sound decision.
You can definitely expect to put out a good bit of your own money on health care expenses when you are enrolled in the Medicare program. In addition to the out-of-pocket cost that we have looked at so far, there is an enormous gap in the coverage.If you ever require nursing home care, you cannot rely on Medicare to assist with the costs. This is considered to be custodial care, and the program will not pay for it. This would also extend to a stay in an assisted living community or in-home custodial care provided by skilled caregiver.
This is the primary issue that elder law attorneys educate clients about. Medicaid will pay for living assistance, but you have to take the right steps at the right time to gain eligibility. This is where we excel, and it is gratifying to help our clients get the care they need while they preserve their resources.
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We are here to help if you have questions about Medicare planning or any other elder law matter. Our firm offers free consultations, and you can send us a message to request an appointment or give us a call at 312-753-6000.