The American Medicare health insurance program covers many of the most necessary medical benefits for recipients at a significantly reduced cost. Unfortunately, Medicare is not free. You must share certain costs with the government to get health care. Below, we’ll go over those costs in more detail so that you can appropriately plan for your medical expenses.
Table of contents
- Do Patients Pay For Medicare?
- How To Protect Yourself From Costly Medicare Coverage Gaps
- Medicare Isn’t Free, So Get Supplemental Coverage
Do Patients Pay For Medicare?
You can expect certain predictable costs from Medicare, especially if you stick with Original Medicare benefits (Parts A and B). These include your annual deductible, monthly premiums, and coinsurance costs.
Others are known but less predictable, such as coinsurance for extended hospital stays or multiple blood transfusions. Let’s first look at the Medicare costs you can effectively budget for to see the expenses associated with Medicare.
Medicare Part A Costs
Most beneficiaries will be eligible for premium-free Medicare Part A upon retirement. You will receive Medicare Part A (Hospital Insurance) premium-free if you have worked and paid Medicare taxes for at least 40 quarters (or ten years). You may also be eligible to receive premium-free Part A if your spouse has a 40-quarter work history, even if you don’t.
If you are single, or if neither you nor your spouse has a sufficient work history, you will have to pay a monthly premium for Medicare Part A.
These premiums start at $278 if you have at least 30 quarters of work history under your belt. Anything less than that will require you to pay the total monthly premium of $505.
Medicare Part B Costs
Regardless of your work history, you must pay a monthly premium for Medicare Part B. The monthly premium for each enrolled in Medicare Part B coverage (Medical Insurance) will be $174.70.
You also have an annual deductible which you must meet out of pocket before Medicare kicks in and starts sharing the costs of Medicare Part B benefits with you. The annual deductible for each recipient will be $240.
After that, you will only pay 20% of your cost of care (coinsurance), and Medicare will pay the other 80%. Those services include things like:
- Durable medical equipment
- Outpatient therapy
- Most doctor services
You can pay via Medicare Easy Pay if your Part B premium isn’t automatically deducted from your Social Security check.
Medicare Advantage Costs
Medicare Advantage, or Medicare Part C, policies are sold and operated by private health insurance companies, so it’s a little difficult to predict your regular, guaranteed costs.
You will know how to budget accordingly once you see what plan you are purchasing and what company you are purchasing it from.
But one thing you can count on is your monthly premium. For some lucky beneficiaries, however, you may be able to get Medicare Advantage premium-free if you choose a lower-cost plan.
The reason is that the federal government will pay most, if not all, your premium in exchange for paying into the Medicare system via taxes during your working years.
Other costs you might have to pay with Medicare Advantage include coinsurance, co-pays, and deductibles. The vast majority of Medicare Advantage plans also come with prescription drug coverage. You may have to pay monthly premiums and share the cost of your prescription drugs with your Medicare Advantage provider.
Medicare Part D Costs
Medicare Part D prescription drug coverage is only available to those with Original Medicare. You can’t sign up for Medicare Part D if you have Medicare Advantage. Like Medicare Advantage, Medicare Part D drug plan administration comes from private insurance companies.
Expenses you should budget for include:
- Your monthly premium (which you can get deducted from your Social Security benefits if you wish)
- An annual deductible. Remember that some drug plans don’t have a yearly deductible. But for those that do, the maximum they can charge is $505 per year.
- A late enrollment penalty may be accessed if you don’t enroll in qualified Medicare drug coverage once first eligible.
Low-income Medicare beneficiaries could qualify for the low-income subsidy (Extra Help) program that assists in paying for premiums and costs associated with covered prescription drugs. The program will assist regardless of the Medicare health plan that’s chosen.
The Donut Hole
With a Medicare Part D drug coverage plan, you may enter a coverage gap known as the “donut hole.” This coverage phase begins when you spend more than a certain amount of money on drugs in any given year. For , that threshold will be $4,660.
Then you are responsible for 25% of the total cost of brand-name and generic drugs. Before you exit the coverage gap, you will have to spend a certain amount of money out of pocket for your prescriptions for the rest of the year. Medicare takes on a more significant share of the cost again.
But you will automatically exit this coverage gap at the beginning of a new year.
How To Protect Yourself From Costly Medicare Coverage Gaps
Original Medicare is relatively comprehensive, especially if you pair it with a Medicare Part D prescription drug plan. But it will only cover some things. If you aren’t careful, the gaps in coverage that Medicare won’t pay for can quickly get very expensive.
But you have a few affordable options that can help cover the gaps in your Medicare coverage and protect your life savings.
Taking Advantage of Medicare Advantage
The law requires Medicare Advantage plans to offer you the same benefits you get from Original Medicare Parts A and B.
More often than not, your Medicare Advantage provider will offer additional benefits that will plug the coverage holes inherent in Original Medicare.
Getting extra benefits like dental and vision coverage is standard. And we told you earlier that Medicare Advantage plans usually come with prescription drug coverage, too.
Because of this, you will not need to sign up for Medicare Part D. You can’t legally sign up for Medicare Part D if you have Medicare Advantage.
If the beneficiary is also qualified for Medicaid, they could enroll in a Special Needs Plan if available. These Medicare Advantage plans have benefits that cater to beneficiaries with special needs.
Medicare Supplement Insurance (Medigap) Costs and Benefits
Medigap health coverage is a standardized form of supplemental coverage for Original Medicare, which the federal government regulates. Private health insurance companies sell and operate these policies.
You can choose from ten plans with varying levels of coverage. For the most part, the most important expense you can budget for with a Medicare Supplement policy is your monthly premium.
You may be subject to certain coinsurance and copayments depending on your plan.
Do I have to pay for Medicare Part A or Part B?
Most Medicare beneficiaries will not have to pay for Medicare Part A. They will be responsible for Medicare Part B’s monthly premium. Other parts of Medicare, such as Medicare Part C or Part D, will have varying costs depending on where you live and your chosen plan.
Do you always have to pay for Medicare?
Most people will be required to pay. Some programs are available to lower-income people who will pay for Medicare’s costs. These Medicare Savings Programs will vary depending on the state.
How much is taken out of your Social Security check for Medicare?
The standard Medicare Part B premium is $174.70.
When do I have to start paying for Medicare Part B?
As people age into Medicare, they become eligible for Medicare. You’ll start paying Medicare Part B up starting your Medicare coverage. For most beneficiaries, this will be the month they turn 65.
Medicare Isn’t Free, So Get Supplemental Coverage
Even though Original Medicare covers many of its beneficiaries’ medical expenses, it’s not free and doesn’t cover everything. That’s why a Medicare Supplement plan could be the key to getting your needed benefits. This can help both your health and your wallet at the same time.
With licensed insurance agents who fully understand and can easily explain your options, we can match you with the best Medigap plan. This service is free of charge to callers, and you can ask any questions.
So call us today if you’d like to know your options. Or just complete our easy online rate form to be hooked up with the best plans in your area!
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- How to Reduce Your Medicare Premiums
- Basics of the Medicare Savings Programs (MSP)
- The Average Cost of Medicare in Every State
- Do you automatically get Medicare with Social Security?
- State-by-State Medicare Information and Resources
- What Does Zip Code Have To Do with Medicare?
- When Is Medicare Free, and What Will I Have To Pay?
- Medicare Plans vs. Medicare Parts: What’s the Difference?
- What Disabilities Qualify for Medicare Under 65
- Medicare For Dummies
- Medicare.gov: Medicare’s Official Website
- Unlocking Medicare Benefits When Turning 65
- How Medicare Coordinates Primary and Secondary Coverage
- Medicare Change of Address: How to Update It
- How to Apply for Medicare
- How to Get or Replace Your Medicare Card