Debunking Medicare myths
A number of retirees are provided with Medicare as their financial security and due to this, they know that healthcare costs aren’t going to impact their dreams. While it is important, a lot of people are still unaware of this program which is why people tend to believe a lot of myths which may come up. Here’s the debunking of some the myths which have developed over the years.
1. Myth: Medicare is actually free and pays for everything
This is one of the most common myths which people have along with the fact that retirees are provided with the same coverage they were receiving while they were working. While Medicare can provide coverage which is similar to coverage which was provided by an employer, Part A of Medicare only covers some health care costs, not all. Part A in particular pays only for in-patient hospitalization or even skilled nursing but this is only after a deductible has been reached and only if the hospital stay is required for 2 midnights. In order to get care which is more comprehensive, Part B is a better choice since it covers health care costs of outpatient visits as well while Part D of Medicare covers the cost of prescription drugs. Part B is one which people are automatically enrolled for however if you haven’t signed up for social security, then you would have to intentionally sign up for the coverage if you’re almost 65 yrs of age. Part D of Medicare is one which is optional and usually sold by private insurers which is why coverage for drugs and premiums can vary according to the plan.
2. Myth: Medicare is bankrupt
People are worried that Medicare will be driven into bankruptcy due to the baby boomers who are now aging however this has not happened and it is unlikely that it will happen. Medicare Part A is funded through payroll deductions out of 2.9% of the annual income of workers in the US which then go to the Hospital Insurance Trust Fund out of which Part A recipients are paid. It is likely that more workers will enter the labor force and despite increases in inflation, the amount of money in the Fund is expected to peak and then drop slightly by 2025. However this is unlikely to become Medicare’s undoing; it will simply pose a risk and probably change the way Part A pays for healthcare services but nothing more.
3. Myth: Medicare is not necessary
Because baby boomers have begun to live longer lives, the cost of health care too is rising which is why Medicare is likely to remain an important program which will help support a large proportion of the GDP of the country along with protecting seniors throughout the country by providing them with financial security.
The chances of Medicare disappearing being low is something which is good especially for those people who are thinking of retiring soon however it doesn’t mean that the appropriate steps shouldn’t be taken to prepare for healthcare costs of the future. A proper retirement plan ought to be devices with a savings target to be reached along with other expenses which could be incurred so that the retirement budget crafted out is one which is long lasting and decent.