For most folks on Medicare, Medicare Part A – hospitalization coverage – doesn’t cost anything. But Medicare Part B requires a monthly premium. Throughout the years, the amount that was charged for Medicare Part B was the same across the board, regardless of your income or other financial factors. That, however, is no longer the case today – and depending on how much income you earn and how you file your annual tax return, you could find yourself paying a great deal more than the average for this health care coverage.
Several years ago, the way in which Medicare Part B’s premium was determined was modified, based upon the amount of income that an individual or couple earned two years prior. And, while many Medicare beneficiaries still fall into the standard monthly premium category (which is $134 per month, in 2018), others who are considered higher income earners will be required to pay more. In some cases, a lot more!
Luckily – Medicare just rolled out a cool little premium calculator. You can click here to access it – use the lower right tab on the screen that says “Calculate My Premium” to get started.
If you are enrolled in Medicare Part B coverage, there are also some other expenses that you need to be mindful of. These come primarily by way of deductibles and coinsurance. For instance, in 2018, there is a one-time annual deductible of $183 that needs to be met before Part B benefits will pay out.
Once you have met your Medicare Part B yearly deductible, you will usually be required to pay for 20% of the cost of most of the items and services you incur. For instance, this 20% Part B coinsurance will come into play for outpatient therapy, as well as most of the doctors’ services that you receive. This includes most of the doctors’ services that you receive if you are an inpatient in a hospital.
In addition, because Medicare Part B pays for durable medical equipment and / or supplies that are prescribed to you by a doctor, you will typically have to pay 20% of the cost of these, as well.
Depending on how extensive your Medicare Part B services are during a given year, the amount of your out-of-pocket expenses could really add up. One way to help with reducing these costs, though, it to purchase a Medicare Supplement insurance plan.
Medicare Supplement – also referred to as Medigap insurance – is designed for paying many of the “gaps” in Medicare Part A and B coverage. But because there are ten different Medicare Supplement plans to choose from, not all of these plans will provide coverage for Medicare Part B costs. So, it is important to ensure that you go with one that offers the specific coverage that you need.
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Author Bio: Ben started Prepare for Medicare in 2014 to help people help people get objective answers to questions about Medicare. He’s held leadership roles at numerous Fortune 500 Medicare health insurers in product development, sales, marketing and strategy for over 20 years.