As you approach age 65, you may be worrying about how you will handle unexpected medical costs. Luckily, Medicare can help. Understanding your options, and what is available to you can help you manage your health expenses as you age.
There are only two ways to get Medicare coverage for things like doctor visits, outpatient care, and inpatient hospital care—through Original Medicare (Part A and Part B) or through a Medicare Advantage Plan. The costs associated with each vary considerably, and the choices you make directly influence how much you will pay out-of-pocket for coverage.
Did you know that Medicare has a variety of programs available to help you pay for health care and drug coverage? If you’re interested in learning how you will pay for Medicare, here’s some information on what to expect, along with some options to explore that could end up saving you some money.
Medicare Costs in 2019
The exact amount you pay for Medicare coverage is based on several factors, including your income. Original Medicare typically carries a monthly premium along with a few other out-of-pocket expenses, such as a deductible, coinsurance and copay.
While there are five different income tiers used to calculate costs, Part A is typically free for most people. Part B is not, and carries a standard premium of $135.50 per month. There is also a Part B deductible of $185 per year. Once this is met, you can expect to pay a copay for most doctor services, outpatient therapy, and durable medical equipment equal to 20 percent of Medicare approved costs.
Seniors who choose a Medicare Advantage plan (also known as “Part C”) over Original Medicare receive their Part A and Part B benefits, along with a few extras, such as dental, vision, and often, prescription drug coverage. Most MA plans carry a monthly premium for the plan, in addition to the standard monthly premium for Part B benefits. Costs associated with Medicare Advantage vary by plan. Some plans pay a portion of your Part B premium. Some plans charge yearly deductibles, regular copays and coinsurance, while others do not.
How You Pay for Medicare
Whether you have Original Medicare or a Medicare Advantage Plan, if you receive Social Security benefits, Railroad Retirement benefits or Office of Personnel Management benefits, your Part B premium will be deducted automatically each month from your benefits check. If you do not receive these benefits, you will receive a bill for Medicare coverage. If you have a Medicare Advantage plan with a monthly premium, you can expect to be billed separately by the insurance company that provides your Part C coverage. If the plan requires you pay a Part B monthly premium, it is usually deducted automatically from your benefits check.
Again, in 2019, most Original Medicare recipients pay the standard Part B premium amount, and you can expect $135.50 to be taken from your benefits check. Retirees with higher incomes pay a higher premium, calculated using the modified adjusted gross income on the most recent tax return.
Financial Help Is Available
The good news is, there are several programs available to help people with limited income and resources get the coverage they need and deserve.
Medicaid is a joint federal/state program that helps pay for medical costs for people with limited income and resources. In many cases, Medicaid offers additional benefits not provided by Medicare, such as nursing home care and prescription drug coverage. Eligibility rules differ by state. Be sure to call your state Medicaid program to see if you qualify.
State Medicare Savings Programs were created to help seniors pay for premiums and out-of-pocket costs like deductibles, coinsurance, copays and even prescription drug coverage costs. Eligibility is based on income.
The PACE program was created to help elderly seniors in need of nursing home level care receive services at home or in a PACE center rather than at a nursing home or elder care facility. To qualify, you must be at least 55 years old, live in the service area of a PACE organization and need nursing home-level care. PACE often covers dental care, prescription drugs, meals, preventive care, emergency services and more.
If you qualify for Medicaid, you pay nothing for PACE coverage. If you do not qualify for Medicaid, you pay a monthly premium for prescription drugs along with a monthly premium to cover the costs of long-term care. However, there is no deductible or copayment.
Extra Help paying for prescription drug coverage is available for those who meet certain income and resource limits. If you qualify, you may pay a reduced amount for your Medicare drug plan premium and deductible. In 2019, seniors with individual income up to $18, 090 or $24,360 as a married couple qualify for extra help. Seniors who have full Medicaid or get Supplemental Security Income (SSI) benefits, automatically qualify. Of course, using generic drugs over brand names, using mail order services and choosing the right drug plan can help keep drug costs low.
Medicare Savings Program
Extra Help with Part D