When you hit 65 and start cashing in on your Medicare coverage, or when you’re a little bit younger and qualify nevertheless, you may find yourself a little confused about how it all works. Got Medicare and Social Security questions? Here are a few basics you should know before you dive right in.
Where the money comes from
Medicare coverage comes from two sources. The first is, of course, taxation. A percentage of the working force’s payroll is taken by the government to afford Medicare. Another portion, though, comes from monthly premiums deducted from Social Security checks. This means that your Social Security and Medicare rate are tied into one another.
What it covers
Medicare covers a number of areas of health, but not all of them. These include hospital insurance in case you need to stay in a hospital overnight, Medical insurance for doctor services and so on, Medicare advantage, a regional coverage plan offering greater coverage under a designated provider, and prescription coverage to help pay for medication.
Why it matters
Surveys have shown that the population is living longer than ever and the younger generation is expected to live to 100 years as a base life expectancy. Unfortunately, a good portion of older citizens live below the poverty line or earn only enough income to cover their basic needs. Others might have enough money to live well, but could still use the help in terms of medical coverage.
The money that you have in your golden years has to last, and it’s getting harder and harder to make that happen, considering how much longer we’re living these days. Social Security and Medicare, for many, are the difference between poverty and prosperity.
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