Medicare is the federal health insurance program for Americans over 65. While Medicare delivers many free and reduced-cost services to seniors, there are still some extra costs associated with Medicare. To understand more about what costs patients can expect when using Medicare, read on.
Premiums and Deductibles
Approximately 99% of Medicare users don’t need to pay a monthly premium for Medicare Part A, which covers inpatient hospital care. However, if you’ve spent fewer than 10 years working a job in which you paid Medicare taxes, you might need to pay a premium of up to $499 per month, depending on your past tax contributions. Still, all Medicare users are subject to a deducible – in other words, an amount of money you’re responsible for paying, before your Medicare insurance kicks in. The Part A deductible is $1,556 in 2022.
Medicare Part B, on the other hand, requires a premium for everyone. This monthly cost starts at $170.10 in 2022, but may be higher depending on your income. The Part B deductible for 2022 is $233 per year, meaning that once you’ve spent this amount on non-hospital medical services, Medicare coverage will begin.
Other Patient Costs
Once your Part A deductible has been covered, the first 60 days of a hospital stay are free. However, inpatient days moving forward come at a cost: $389 per day in 2022, and $778 per day after 90 days are used. After 150 days, the patient is responsible for 100% of costs.
Part B requires patients to cover 20% of any healthcare service or item, with Medicare covering the rest, assuming the deducible has already been paid.
Late Enrollment Penalty
Be aware that Medicare Part B enforces a late enrollment penalty, amounting to an extra 10% on top of your existing premium for each year that you could have signed up but didn’t. The purpose of the penalty is to adjust for unpaid premiums in previous years, while subsequently benefitting from Medicare coverage at an older age. Saying that, it’s possible to avoid the penalty if you eschew Part B in favor of a workplace health plan, then switch to Medicare later on.
Joining Medicare doesn’t automatically give you free or low-cost prescription drugs. Instead, it’s necessary to pay for additional Medicare coverage, known as Medicare Part D. The cost of Part D depends on which plan you choose – some plans come with a premium under $10 per month, while others may be over $100. It all depends on your individual prescription drug needs, which policies are available in your area, and how high a deductible you wish to have. Medicare.gov is a great online resource to quickly see Part D drug plan options.
Medicare Advantage, also known as Medicare Part C, offers additional coverage for healthcare services such as vision, dental, hearing, and other overall health benefits like gym memberships. Part C plans can also be customized for treatment of specific diseases, in order to help people with chronic conditions to better manage their health and finances.
Medicare Advantage is an alternative to Part A and Part B. It rolls all inpatient and outpatient services into one plan, with extra benefits too as outlined above. Prescription drugs are usually covered as well in a Medicare Advantage plan. Out of pocket costs vary, but are usually lower than what you’d pay with original Medicare. On the other hand, you’ll need to pay the Medicare Advantage plan’s monthly premiums in addition to the set Part B premiums. Your final premiums and deductibles depend on which Medicare Advantage plan you choose. Similar to Part D, there’s a wide variety of choice and cost, depending on your needs.
Services Not Covered By Medicare
While Medicare covers a huge range of medical care for emergencies and chronic conditions, there are some specific services the insurance doesn’t apply to. For these, patients will need to pay out of pocket or use another method of insurance; whether that’s a private policy, or a public option like Medicaid. Services not covered by Medicare include dental work, podiatry, elective procedures like cosmetic survey, and long-term stays in a skilled nursing home.