With the switching of an old year’s calendar over to the new, there are oftentimes many changes in store. And, if you’re age 65 or older and a participant in Medicare, this can sometimes equate to changes in related costs. Now that we’re in the middle of the 2019 AEP, and with the Medicare Open Enrollment Period (OEP) fast approaching, it’s a great time to make sure you’re reviewing all of your anticipated Medicare costs for 2019, not just your MAPD, PDP or Medicare Supplement premiums.
With the ever-rising increase in health care expenses, the deductibles, copayments, and premiums that are associated with Medicare will oftentimes go up. This is the case as we approach 2019.
Let’s take a closer look at Original Medicare (Medicare Parts A and B, as well as Part D prescription drug benefits). We will also review the anticipated cost changes with Medicare Advantage (Part C) plans for 2019, so that you know what to expect going forward.
For most people, there is no premium cost for Medicare Part A benefits. As an example, you are eligible for Medicare Part A for free if you are age 65 or over, and you meet the following criteria:
If you are under age 65, you could still receive Medicare Part A premium-free if you have been receiving either Social Security or Railroad Retirement Board disability benefits for at least 24 months, or if you have End-Stage Renal Disease and you meet certain other requirements.
However, if you (and your spouse) did not work and pay into the Medicare system, then you may not have enough “work credits” available to qualify for premium-free Medicare Part A coverage. In this case, your premium for Medicare Part A in 2018 is $422 per month. The Medicare Part A premium for 2019 will rise to $437 per month.
It is important to note that if you have chosen to purchase Medicare Part A and pay a premium for it, you may also be required to purchase Medicare Part B. Therefore, you will be required to pay a premium for both Medicare Part A and Part B.
As with most other health insurance related coverage options, there are various out-of-pocket costs that are associated with Medicare Part A. For 2019, these include the following:
If you have a Medicare Advantage plan, or a Medicare Supplement that covers the Medicare Part A costs, then this section doesn’t apply to you. The only way this would, is if you’re “bare with Medicare” and only have a Prescription Drug Plan (PDP). In 2019, those who are covered under Medicare Part A for hospital related expenses are required to pay the following amounts:
If you have used up all of your Part A benefits in a benefit period, and you have no more reserve days left, then you are responsible for paying all costs going forward.
Regardless of whether or not you have enough work credits to qualify for Medicare Part B, there is a monthly premium involved with this part of the Medicare program. In this case, most Medicare Part B enrollees will pay a standard monthly premium of $135.50 per month in 2019. If, however, you are considered to be a higher income earner, then you may be required to pay more.
For example, based on your income from two years prior, as well as the manner in which you pay your income taxes, you may be required to pay up to $460.50 per month for Medicare Part B coverage.
|If you file as an individual, and your income from 2017 is:||If you file a joint tax return, and your income from 2017 is:||Income-related monthly adjustment amount:||Total monthly premium amount in 2019 for Medicare Part B is:|
|Less than or equal to $85,000||Less than or equal to $170,000||$0||$135.50|
|More than $85,000 but less than or equal to $107,000||More than $170,000 but less than or equal to $214,000||$54.10||$189.60|
|More than $107,000 but less than or equal to $133,500||More than $214,000 but less than or equal to $267,000||$135.40||$270.90|
|More than $133,500 but less than or equal to $160,000||More than $267,000 but less than or equal to $320,000||$216.70||$352.20|
|More than $160,000 but less than $500,000||More than $320,000 but less than $750,000||$297.90||$433.40|
|$500,000 or more||$750,000 or more||$325.00||$460.50|
You may also pay more than the standard Medicare Part B monthly premium of $135.50 if you enroll for this part of Medicare late – and, this increase in premium will remain with you for the remainder of your lifetime.
With Medicare Part B services, such as doctor visits and required medical equipment, you will typically be required to pay a co-payment amount of 20%. There is also an annual Medicare Part B deductible that must be satisfied before any benefits will be paid. The amount of this deductible for 2019 is $185.50.
If you are receiving clinical laboratory services and you are covered under Medicare Part B, then you will typically pay $0 for Medicare-approved services. Likewise, if you qualify for home health care services through Medicare Part B, then you will pay $0 for such services. However, the 20% copayment will apply for any durable medical equipment that you may require.
While Medicare Part A and Part B are offered directly through Medicare itself, Medicare Part D – prescription drug coverage – is sold through private insurance companies that have been approved by Medicare to do so. The big names here are Aetna, SilverScript, Humana, AARP/United Healthcare, WellCare, etc.
Because of this, both the benefits and the premium amounts can differ, from one insurance carrier to another. However, similar to with Medicare Part B, your Medicare Part D premium can be dependent upon your income as reported on your IRS tax return.
As an example, your IRS tax filing status and your annual income two years prior will also determine the amount of Medicare Part D premium that you pay.
|If you file an individual tax return and your 2017 income was:||If you file a joint tax return and your 201 income was:||If you are married and you file a separate tax return:||Your Medicare Part D monthly premium in 2019 will be:|
|$85,000 or less||$170,000 or less||$85,000 or less||Your plan premium|
|Above $85,000 up to $107,000||Above $170,000 up to $214,000||N/A||$12.40 + your plan premium|
|Above $107,000 up to $133,500||Above 214,000 up to $267,000||N/A||$31.90 + your plan premium|
|Above $133,500 up to $160,000||Above $267,000 up to $320,000||N/A||$51.40 + your plan premium|
|Above $160,000 up to $500,000||Above $320,000 up to $750,000||Above $85,000 up to $415,000||$70.90 + your plan premium|
|$500,000 or more||$750,000 or more||$415,000 or more||$77.40 + your plan premium|
Similar to with Medicare Part B, if you enroll in Part D coverage late, then you will be penalized with a higher premium – and this late enrollment penalty will keep your premiums higher for the rest of your lifetime.
In addition to the premium that you pay for Part D prescription drug coverage, you may also be required to pay out-of-pocket deductibles, copayments, and / or coinsurance. These amounts will vary, based on the Medicare Part D plan that you have chosen.
Medicare Advantage plans – which offer an alternate method of receiving your Medicare Part A and B benefits – are also offered via independent insurance carriers. Therefore, the benefits that are offered, as well as the premiums that are charged, can differ from one to another.
Overall, however, based on information from the Centers for Medicare and Medicaid Services, or CMS, on average, Medicare Advantage plan premiums will decline in 2019, while plan choices and new benefits are expected to increase. However, be sure to check to see if your plan has poor Medicare Star Ratings. You can read an article I posted about this by clicking here.
Choosing the right Medicare plan for you can be somewhat confusing. There are many different components to consider – including the benefits that are covered, as well as the premium that will be charged.
With that in mind, it is essential that you gather as much information as possible before you commit to any Medicare plan. That way, you can be more assured that you are moving in the right direction with regard to the benefits you’re entitled to, as well as the premium that you will be required to pay.
Be aware; the 2019 Annual Election Period (AEP) ends December 7! But there may actually be a bit more time for you to make a change if this date passes and you’re not happy with your coverage. That’s because the 2019 Medicare OEP (Open Enrollment Period) starts again, after a 10-year hiatus. There’s also a really great guide to read, and you can access that by clicking here.