Out-of-pocket expenses can quickly get out of control if you don’t know how to manage them effectively. Whether you’re claiming medical expenses on your insurance or invoking your Medigap policy, finding ways to reduce out-of-pocket expenses can make retirement far less stressful.
Office Visit Copays
When you sign up for Medicare, Parts A and B generally cover most of your copayments. A copayment (copay) is a small amount of money, usually between $10 and $35, that you pay when you visit the doctor or go to the emergency room. Part A covers inpatient hospital bills, among other costs, and Part B covers doctor visits.
You might have to pay a copay if you visit the hospital on an outpatient basis. The same goes for mental health services.
Since copays are typically small, consider budgeting for them every month. You might know that you visit your local hospital for tests, therapy, or other services a certain number of times every 30 days. Set aside the copay amounts from your other expenses so you don’t have to worry about covering them.
You can also save on out-of-pocket medical expenses like copays with the following tips:
- Visit your doctor’s office instead of the local hospital when possible.
- See if you qualify for Extra Help and other low-income programs for Medicare beneficiaries.
Join your local pharmacy’s discount drug plan to avoid high copayments on prescription medications.
Your monthly premiums are the amount of money you contribute to Medicare and other insurance policies to continue to take advantage of them. While your monthly premiums depend largely on your income and the Medicare programs you select, there are a few ways to reduce your out-of-pocket medical expenses, including the following:
- Appeal Medicare premium costs through the Medicare website.
- Consider increasing your deductible if you’re generally healthy and don’t have many reasons for claiming medical expenses on insurance.
- Notify the U.S. government about reductions in your income.
While you can’t exercise full control over your monthly premiums, take as many opportunities as possible to lower them. Since these are fixed costs, add them to your budget so you always have sufficient room in your checking or savings account to cover them.
According to the U.S. government’s official Medicare website, Medicare beneficiaries pay deductibles of $1,364 and $185 per year for Medicare Parts A and B, respectively. Premiums and deductibles vary for Parts C and D depending on the plan you choose and your income.
Since you only have control over your Parts C and D deductibles, you might want to consider increasing them to lower your monthly premium. While you’ll pay more out of pocket if you have to fill a prescription, you’ll spend less money on a monthly basis.
Out-Of-Network Provider Expenses
Some providers no longer accept Medicare patients. If you find yourself in the hospital, you might not get the chance to approve providers who accept Medicare, in which case you might wind up with a larger bill than you anticipated.
When possible, request a provider — from physicians to radiologists — who accepts your Medicare plan. If one is not available, ask the provider for a discounted bill. In many cases, providers offer special pricing for patients who have to pay out of pocket for their services instead of claiming medical expenses through insurance.
It’s nearly impossible to remove all out-of-pocket medical expenses, but you can keep them under control. Use the above tips to stretch your budget and to use your Medicare plans more effectively.