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The Cost Of Medicare
Have you ever wondered how much Medicare is going to cost you? Why are there separate parts of Medicare and separate costs of each part of Medicare?
What is the total cost of my Medicare and how do I pay each premium for Medicare?
These questions are important to everyone as they begin their search for the best Medicare insurance plans and how to begin understanding Medicare costs. Many people enrolling into Medicare are also retiring, which means your income may be changing, sometimes substantially, so it is important to know your cost upfront so you can plan for the future. When it comes to paying for Medicare, it can be easy to get the estimate of total cost of Medicare as well as how to pay for each part of Medicare.
It could be quite a surprise, when you turn 65, or come off Employer Group coverage, and realize that not all your Medicare will be free. Understanding the cost of Medicare for Part B, Part D, and any supplemental coverage, along with getting estimates for each part of Medicare can be easy. #costofmedicare #medicare cost
Medicare Part A Cost – Hospital Coverage
Part A is the free part of Medicare! Kind of. For most people, the cost of Medicare Part A will be zero. If you’ve worked, or are married/divorced and your spouse worked at least ten plus years while in the United States, your Medicare Part A will be no cost; these costs were paid with your taxes that have come out of your paycheck.Medicare Part A So, although Medicare Part A seems free on the surface, you have actually been paying for it most of your life.
If you have to buy this part of Medicare Part A, you will be charged a monthly premium based on the amount of work credits you have earned. In 2020, if you worked between 30-39 quarters, you will pay $252 per month, and if you worked 29 or fewer quarters, you will pay $458 per month. To be considered eligible to buy into Medicare part A, you will have to have been a legal resident or have a green card for at least five years in the United States.
Part A, known as Hospital coverage, will cover your inpatient medically necessary care (excluding doctor charges) after your Part A per benefit period deductible. In 2020, this deductible is going to be $1,408.
If you are hospitalized, in a skilled nursing facility, or hospice care, you will also have a coinsurance for the amount of time you spend in these facilities. While hospitalized, you will have $0 coinsurance for days 1-60, $352 per day for days 61-90, and $704 per day for days 91-150. Anything beyond 150 days you will pay all costs of your hospitalization. If in a skilled nursing facility, you will have a $0 coinsurance for days 1-20, but a $176 per day coinsurance for days 21-100.
The cost-share under Medicare Part A (deductible and coinsurances) may increase each year. Many Medicare Supplement plans cover these cost-shares under Medicare Part A.
Medicare Part B Cost – Medical Coverage
If Medicare Part A is free, is Medicare Part B also free?
Unfortunately, most everyone pays a monthly premium for Medicare Part B. The standard Part B, known as Medical coverage, premium amount in 2020 is $ 144.60 per month; scheduled to increase to $ 153.30 in 2021.Medicare Part B Most people pay the standard amount for Medicare Part B, however if your modified adjusted gross income (MAGI) exceeds a certain amount, you will end up paying more for your Medicare Part B. Your MAGI is determined by your most recent tax return filed with the IRS, typically from two years prior to enrolling. If your MAGI exceeds the standard amount, you will pay what is known as Income Related Monthly Adjustment Amount – IRMAA. IRMAA will be discussed more in depth below.
The premium is not the only cost under Medicare Part B. You are also responsible for certain cost-shares. The first aspect is the Medicare Part B annual deductible, which is $198. Luckily, unlike the Medicare Part A deductible, you will only pay this once per year. Once you have met the Part B annual deductible, you essentially enter an 80/20 split for your Medicare outpatient coverage, with Medicare Part B paying 80%, and you paying 20%. Although 20% really doesn’t sound like a lot, it is important to remember that there is no limit to this 20%. The lack of an out-of-pocket maximum on Medicare cost-sharing is why it is essential to look into additional coverage, such as a Medicare Supplement plan. If you give us a call at 877-88KEITH (53484) we can review the benefits of MediGap plans in your area!
You will have a deductible of $198, but once that is met, you will only need to pay 20% of your Medicare-approved services.
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