Costs of Medicare
The amount you pay for Medicare will depend on a few factors, including the type(s) of Medicare plan(s) you enroll in. There are, however, basics you need to know to understand the costs of Medicare.
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Medicare premiums and deductibles are the main way you will pay for your coverage. Like most insurance policies, a month-to-month payment is required to keep the plan active. The same applies to Medicare.
If you happen to miss a month, you will not be immediately suspended. Instead, you will receive a series of notices over three months until Medicare receives your payment. If you don’t make the payments within 3 months, your plan will be suspended. You can reinstate it if you pay the penalty and make up the lost premiums.
Deductibles, on the other hand, are a bit different. They are required every year you use a benefit of your Medicare plan. So, the first time you use a benefit of the plan, you’ll have to pay the deductible. But, if you go the year without using any benefits, you will not have to pay it for that year. Once you pay it, you won’t have to pay it again for that calendar year, and it will reset the following year.
Another major cost of Medicare is referred to as cost-sharing. When you receive a benefit through your Medicare plan, you may be required to cover part of the cost.
This will either be a flat fee known as a coinsurance fee or a percentage of the total cost known as a copayment. Copayments are typically 20%—Medicare pays 80%. Otherwise, you will have a dollar amount, like $10. Or, you may not have a cost-sharing fee at all.
What does all of this mean for the cost of your Medicare? Every Medicare plan you purchase is based on these costs. So, while we may not be able to give you an exact number, this is a good place to start.
We can, however, tell you the probable cost of your Original Medicare coverage—it is the same for everyone. Prices can change based on your income—more if you are wealthier, less if you are eligible for financial assistance.
You won’t have to pay a Part A premium if you’ve worked for 10 years. If not, you’ll pay up to $471 in 2021. The deductible for Part A is currently $1,484.
For Part B, the 2021 premium is set at $148.50. The deductible is $203. Cost-sharing for both plans will likely be set at 20% if you have them.
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Better Insurance Management wants to make sure you feel comfortable and confident in your Medicare coverage. Learn more by calling (732) 458-5000.