5 Ways to Save Money on Medicare

The fact that Medicare is not free can come as a shock to some. Some seniors don’t realize the working years they spent paying Medicare taxes only qualified them to have premium-free Part A. Everyone pays a premium for Medicare Part B, and deductibles and coinsurance are also left for you to pay. Knowing what to expect and your money-saving options can help you with finances once you transition to Medicare.

Let’s look at how beneficiaries can save, from securing comprehensive medical coverage to knowing when to take Social Security benefits. For more information about saving on Medicare while having fuller coverage, learn more here at Medigap Plan G – Two ways to save.

1. Enroll in a Medigap plan

Medigap plans help beneficiaries with the out-of-pocket costs Medicare leaves them to pay. For example, Medicare Part B pays 80% of your outpatient services and treatments, leaving you with 20%. Since there is no cap on this 20%, your out-of-pocket expenses could quickly add up if you need expensive treatment or services. 

However, if you enroll in a Medigap policy such as Plan G, the plan will help cover these remaining expenses. With Plan G, once you satisfy the annual Part B deductible, it will help pay all your remaining Medicare-approved out-of-pocket expenditures for the year. 

In exchange for a monthly premium, Medigap plans can help you reduce the risk of medical debt if you accrue unexpected healthcare costs.

2. Purchase a Part D plan once eligible

One mistake people often make is delaying Medicare Part D. Medicare Part D covers most of the prescriptions you’d pick up at the pharmacy. However, many seniors enroll in Part A and Part B but don’t want to sign up for a Part D plan because they have little to no medications.

This decision turns into regret for many once they finally enroll in a Part D plan and find out they will be subject to a late-enrollment penalty fee. This penalty is permanently added to your monthly premium, and you will have to pay it for as long as you are enrolled in Part D.

Another reason to sign up for Part D is to have some coverage in the untimely event you get prescribed an expensive medication at some point during the year. This coverage could save you financially because you may not realize that you cannot sign up for a Part D plan any time you want. An enrollment window must be available to apply for a plan, meaning you could spend months paying entirely out-of-pocket before getting one.

To save your future self from trouble, consider enrolling in the cheapest Part D plan available to you to avoid the penalty and financial turmoil.

3. Opt for a Medicare Advantage plan to save on premiums

While having minimal out-of-pocket costs is ideal for some, others can’t seem to justify the amount they would spend on premiums.

If you prefer to save on your Medicare premiums and don’t mind paying for your healthcare as you go, a Medicare Advantage may be a way to help save you money. These plans typically have lower premiums than Medigap plans, many even $0.

Under these plans, you have networks and various copays and coinsurance for your healthcare services and treatments. Several of these plans offer added benefits, such as dental, vision, and hearing coverage or a gym membership. If you don’t visit the doctor that often and don’t mind having a network and copays, this could be a viable option.

Some Medicare Advantage plans even offer a give-back benefit where you receive a credit on your monthly Part B premiums. This option is not for everyone, but it may be worth considering if it can save you more in premiums than paying as you go.

4. Consider a Cancer Policy

You never know what the future can hold, so enrolling in a cancer policy can be one way you save on your Medicare costs in the event you get diagnosed. A lump-sum cancer policy means you receive cash benefits after a diagnosis and can choose to spend any way you want. You can use the money to help pay for treatment, Part D cancer drugs, or even travel expenses if you need to visit a specific doctor or healthcare provider.

As mentioned above, Medicare Advantage plans can be an option if you want to save on your Medicare premiums. The maximum out-of-pocket limit on an Advantage plan in 2023 can be as much as $8,300, and this amount does not include the cost of prescriptions you would need under the Part D section of your Medicare Advantage plan.

Whether you have a family history of cancer to reflect on or want to avoid a potential money pitfall, a cancer policy can be the way to do it.

5. Get the most out of your Social Security benefits

One method that can help you save money on Medicare and increase your finances, in general, is waiting to take in Social Security (SS) benefits. The earliest you can take in SS benefits is age 62. However, this decision means your benefits will be reduced.

Many seniors wait until their full retirement age (FRA) to avoid reduced benefits. However, to get the most out of your SS benefits, you will need to wait until age 70. Once you are 70, they will not increase, but you will receive the maximum amount.

There are many dissenting opinions on whether to wait or take benefits early, but this strategy can be a feasible option for many. Depending on your situation, the additional income may be worth the wait.

Start Early

If there are ways to save money on your healthcare costs, you’ll want to consider them. Taking into account your budget and potential Medicare costs may help prevent you from being blindsided with unexpected bills or expenses once you transition to Medicare.

Starting your Medicare research early and ensuring your future healthcare plans and finances are in order can make a big difference in the long run.