Costs of Medicare

Medicare is one of the most affordable, cost-effective health insurance plans out there. But what costs should you expect?

The Cost of Original Medicare

Original Medicare (Parts A and B) has relatively universal costs across the board. There are 3 basic costs you must pay for both Parts A and B:

  • Monthly Premium: Most people do not pay a monthly Part A premium. If you worked more than 10 years paying Medicare taxes, you are exempt from the Part A premium. This, however, does not apply to Part B. The standard monthly premium for Part B in 2021 is $148.50.
  • Copayments/Coinsurance: These cost-sharing fees are required for certain services/equipment. The typical rate is 20%, but is subject to change depending on the service and limits under Medicare. This will apply to most benefits received through Part B.
  • Deductible: Keep in mind that both your premiums and deductibles are subject to change every year. In 2021, you pay an annual $203 for your Part B deductible. The Medicare Part A deductible is $1,484 for each benefit period.

The Cost of Medicare Advantage

Medicare Advantage, or Part C, will not be the same across the board. Because costs will vary between plans, providers, and locations, there is no national standard premium, deductible, or cost-sharing fees.

Premiums for Part C can range anywhere from $0 to $100 depending on many factors. The good news is that you have options to balance your monthly costs and budgeted coverage. The same can be said for the deductible. Just remember that you will still have to keep up with your Original Medicare payments with Part C.

The Cost of Medicare Part D

Like Part C, Part D costs vary across the board. While premiums and deductibles will change, the amount you pay out-of-pocket for prescriptions will not fluctuate by much.

Prescriptions are categorized by their prices into different tiers, each of which you will have to pay a higher out-of-pocket fee for. These tiers are:

  • Tier 1: Preferred generic prescriptions. Typical copayment: $1-$7
  • Tier 2: Preferred, brand-name prescription drugs. Typical copayment: $10-$15
  • Tier 3: Non-preferred, brand-name prescription drugs. Typical copayment: $30-$40
  • Tier 4 (Specialty Tier): High-cost prescription drugs. Typical copayment: 31% cost-sharing fee

The Cost of Medicare Supplements

Like both Parts C and D, Medicare Supplement costs will vary greatly across the board depending on various factors. The two biggest players, however, are coverage and rating.

Each of the 10 Medicare Supplements have a different amount of included coverage. The more coverage in the plan, the more you will pay on a monthly basis, but the less you will pay out-of-pocket. When you sign on for a supplement plan, your premium will also be set by a rating system. These ratings systems are as follows:

  • Community-rated: Your premium will be the same as everyone else covered by the same supplement by the insurance company regardless of age.
  • Issue-age-rated: Your premium is set based on your age when you join the plan. So, the younger you are when you sign up, the less you will pay. It will not increase over time.
  • Attained-age-rated: Your premium is set based on your application age, but will increase as you grow older over time.

Find Medicare Coverage For Your Budget

The Coleman Agency will help you find a plan that works for your budget. To learn more, give us a call today.

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