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These strategies can help lower your Medicare costs.
Contest the Medicare high-income surcharge.
If your adjusted gross income (plus tax-exempt interest income) is more than $85,000 if you’re single or $170,000 if you’re married filing jointly, you’ll have to pay extra for Medicare. The last tax return on file determines your premium. But if your income has dropped since then because of certain life-changing events, such as divorce, death of a spouse or retirement, you can submit Form SSA-44 and ask Social Security to substitute your more recent income. For more information, visit www.ssa.gov or call (800) 772-1213.
Find a better drug plan during open enrollment.
You have from Oct. 15 to Dec. 7 every year to shop for a Part D prescription-drug plan. Go to the Medicare Plan Finder at www.medicare.gov/find-a-plan and compare premiums as well as total out-of-pocket costs for your drugs. A plan with low premiums may not cost the least over the long run if it has high co-pays for your drugs, says Michael Penca, senior director of Medicare for Walgreens.
Pick your first Medigap plan carefully.
Most people fill the gaps in Medicare with a Medigap plan, but the price can vary enormously by insurer even though every plan with the same letter designation provides the exact same coverage. You have six months after signing up for Part B to choose any Medigap plan; after that, insurers can generally charge more or deny coverage because of preexisting conditions. You can get prices for many policies at www.ehealthinsurance.com or from most state insurance departments. Or order a personalized Weiss Ratings Medigap Report ($49 for Kiplinger content readers; weissmedigap.com/kiplinger), which lists premiums for all the plans in your area plus strategies for saving money.
See if you can switch to a lower-cost Medigap plan.
You may be able to save money on Medigap after your six-month initial enrollment period if you’re healthy, and some insurers let you switch to a less-comprehensive policy regardless of health.
Re-shop your Medicare Advantage plan.
If you have a Medicare Advantage plan, you can also shop around for coverage during open enrollment every year. Compare out-of-pocket costs for your drugs and the type of care you need using the Medicare Plan Finder (www.medicare.gov/find-a-plan). Also make sure your doctors and hospitals are still covered.
Use tax-free HSA money for Medicare premiums.
You can’t make new contributions to an HSA after you’re on Medicare, but after age 65 you can use money from an HSA tax-free for Medicare Advantage, Part B and Part D premiums.