When Medicare became the primary health insurance, everyone needed to know if they would have to make financial adjustments to cater for these costs. One of the questions that eligible members commonly ask is how much will it cost them to take up the cover? The discussion about Medicare cost becomes paramount because health always comes first.
Like private health insurance, Medicare comes with premiums, co-pays, and deductible costs. This means that the total amount you will pay per year can, and often does, change. Sometimes it will be higher, and other times it is relatively lower. Of course, this varies depending on your history, your income and the current rate of inflation.
The topic is an expansive one, and a lot could be said about whether or not it is the best form of healthcare everyone needs. However, we will have a closer look at the Medicare cost in 2019 for Part A, B, C, and D and talk a little about covering the gaps between the plans.
Medicare Part A; How Much Does It Cost?
Part A covers skilled nursing care, inpatient hospitalization, and a few other health services. According to the Research Data Assistance Center, only one percent of people pay a monthly premium under Part A. The number is low because to qualify for Part A you need to have paid paycheck deductibles for forty quarters or longer, over the course of your working life. This money goes into the Medicare cost and in a sense pre-pays for your future healthcare needs.
The Federal Income Contributions Act (FICA) requires a deduction of 1.45% of your monthly income. Your employer matches this amount to make a total of 2.9%. People who are self-employed have to pay the full 2.9% themselves. If you or your spouse faithfully paid into the Medicare system for the required amount of time, you will not have to pay for Medicare Part A. You will cost share on things like hospital deductibles, but that will be a minimal amount. It is even lesser if you have a Medicare supplement plan.
If neither you nor your spouse paid the Medicare taxes for all the ten years, you could still buy Medicare Part A. The amount you pay will depend on how many years you contributed. As of 2017, people who purchase this premium pay up to $413 per month. However, if you paid taxes for 30-39 quarters, you pay $227.
With this premium, for hospital inpatient and coinsurance, you pay $1 316 per benefit period. You are not charged for the first 60 days, but you pay $329 in coinsurance charges between the second and third month and $658 every lifetime reserve day after the third month. After that, you cover all the costs. As a thing to note, if you are not eligible for Part A, you must sign up at your first opportunity otherwise your premium could increase by 10%. You pay this amount for twice the number of years you could have signed up but didn’t.
How Much Does Medicare Part B Cost?
With Part B premium, you cover Medicare costs per month. If you get Railroad Retirement Board or Social Security, the amount will be auto-deducted from your benefit payment. You get a bill if you don’t get benefit payments. Most people pay a standard amount, but if you have a Modified Adjusted Gross Income of over a certain amount, you may pay an Income Related Monthly Adjustment Amount (IRMAA). Medicare uses the most recent IRS information to determine the IRMAA.
As of 2017, the standard Part B premium amount is $134. It could be higher if you earn more. Most people who get Social Security benefits end up paying less because this premium increased more than the cost of living increase this year. Those with Social Security end up paying a standard amount of $109. Naturally, this only applies to people enrolling for the first time in 2017. If you also have a Medicaid plan, your state will pay the standard $134.
For all Medicare beneficiaries, the Part B deductible is $183 per year. After you meet this amount, you pay 20% of the Medicare-approved amount for the services provided.
Covering the Gaps in Medicare Part A and B
As seen earlier, Medicare Part A covers up to 60 days of hospitalization after which you start to cost share. If you are in hospital longer than 60 days, the daily copay can be expensive. If you stay for 150 days, your coverage runs out. Part B premium is similar. The part B Medicare cost you pay only covers 80% of all approved services. This means that you pay 20% of all your doctor visits, blood tests, X-rays, ER visits and so forth.
It gets worse because there is no cap on your 20%; you pay it all through your lifetime. It may be easy to foot the 20% for a knee replacement but wait until you have to pay it for an illness like cancer. Then, it becomes a burden. This is where a supplement plan can help.
Medicare supplement plans are meant to fill the gap in your coverage. They provide you peace of mind so that even if the unexpected happens, you are covered. They take care of things like deductibles, coinsurance, and co-payments. Some of these plans also include your travel outside the United States.
Medicare Cost of Part C and D
The Part C Medicare cost varies depending on your chosen plan. What you pay in deductibles, co-payments, and coinsurance also differs from one cover to the other. There are different plans, and you can find out more about them using Medicare plan finders available online.
For Part D of the Medicare plan, the amount you pay varies with your income and your preferred package. For people earning an income above a specified limit, you spend an adjustment amount that is related to your income, on top of your plan premium. For example, if you earn anywhere between $107 000 and $160 000, you pay an additional $34.20 to your plan premium.
Medicare costs in 2019 can become a complicated issue for anyone who does not plan ahead of time. You could fall sick at any time, and planning before getting to 65 assures that you have a reliable and cost-effective health cover in place.