As you may know, Medicare is the United States federal health insurance programme for people who are aged sixty-five or older and certain younger people who have disabilities. It is also available to people who have end-stage renal disease.

If you are eligible, you have several enrollment options, so the more you understand Medicare and how it can impact your finances, the better.

Here are just five important things that you should know. 

#1 - Different Parts of Medicare Cover Different Services

The three different parts of Medicare are Part A, Part B, and Part D.

Part A refers to hospital insurance. It covers inpatient hospital stays, hospice care, nursing facility care, and some health care at home.

Part B refers to medical insurance. It covers specific doctors’ services, outpatient care, preventive services, and medical supplies.

Part D covers prescription drug coverage, including recommended vaccines.

#2 - Medicare Supplement Insurance Is Available Through Private Insurance Companies

Certain expenses are not covered by parts A and B, including hospital deductibles, coinsurance, and other out-of-pocket expenses.

Therefore, it may be worthwhile taking out Medicare supplement insurance from a private insurance company to ensure you have full protection.

You should look at the financial cost and determine whether you believe you need supplement insurance, which is known as Medigap.

While your finances will be impacted more if you do take out Medigap coverage, you will have peace of mind that you have full protection when you need it.

Bear in mind that you must have Medicare parts A and B before you can get a Medigap policy.

#3 - Higher Earners Pay Increased Premiums on Part B and Part D Coverage

If your salary is above average, you could need to pay increased premiums on Medicare Part B and Part D.

The income-related monthly adjustment amount is an increased premium added to the standard Part B and Part D premiums that higher-income earners are charged.

The precise amount changes annually in line with inflation. In 2023, it begins at $97,000 for individuals and $194,000 for joint tax filers.

#4 - Part A and Part B Costs Can Change Annually

Even if the income-related monthly adjustment amount does not apply to you, be aware that the costs of Medicare are subject to change on an annual basis.

However, while Part A costs increase each year, most people do not have to pay for Part A. You only have to pay for it if you pay Medicare taxes for fewer than forty quarters during your years of working. You are automatically enrolled in Part A when you reach the age of sixty-five.

Furthermore, the standard monthly premium for Part B of Medicare coverage can decrease. In 2023, people who are enrolled with Medicare Part B will see their payments decrease by $5.20 per month, making the amount $164.90.

The Part B deductible will also decrease in 2023 from $233 to $226.

#5 - You Could Consider Part C Coverage

So-called Part C policies, which are also known as MA Plans, are offered by approved private insurers.

A Part C plan is an alternative way of getting Part A and Part B coverage. Most also cover Part D.

The advantage of taking out this coverage is that there are no premiums and low or no deductibles.

But most Part C plans set limits on the maximum out-of-pocket expenses you pay during a year.

You are also limited to using health care providers that are participants in the plan’s network. And you will require approval before your Part C plan will cover specific services and drugs.