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Medicare
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How Much Does Medicare Coverage Cost?
Medicare can be complicated - when it shouldn’t be! Medicare is divided into parts, which cover specific services and varies in cost depending on your location and provider.
Original Medicare (Part A and Part B)
Original Medicare consists of Part A and Part B. Medicare Part A is hospital insurance that covers inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care while Medicare Part B covers doctor visits and other medical services and equipment.
| 2022 Medicare Cost | ||
|---|---|---|
| Part XXX | Premium | Deductible and Co-Insurance |
| Part A |
Free (with qualifying work history) $274-$499/month (without qualifying work history) |
$1,556 deductible for each admission per benefit period. |
| Part B | $170 (or higher depending on income) | $233 per year and then 20% cost for each Medicare-approved amount service. |
Medicare Advantage Plan (Part C)
Medicare Advantage Plan (a.k.a. Medicare Part C) covers everything from Part A and Part B, plus additional coverage such as routine vision, dental, health wellness programs, and prescription drugs (Medicare Part D). Medicare Part C has varying monthly premiums that can start as low as $0/month depending on your financial situation, type of Part C plan coverage, and provider.
| Medicare Part C plan type | Average premium per month |
|---|---|
| Giveback plan | $0 (plan premium) |
| HMO (Heatlh Maintenance Organization) | $23 + plan premium |
| PPO (Preferred Provider Organization) | $43 + plan premium |
| PFFS (Private Fee-for-Service) | $77 + plan premium |
| Cost plan | $53 + plan premium |
Medicare Part C deductibles also vary. Medicare Part C may have higher copay for healthcare providers not in their plan (out-of-network), as Medicare Advantage Plan is network restrictive depending on the plan type you enrolled in.
Prescription Drug Plan (Part D)
Medicare Part D covers your prescription drugs, which is not covered by Original Medicare (Part A + Part B). You can get Medicare Part D by getting the Medicare Advantage Plan or getting Medicare Part D on its own. Depending on your income and the plan or covered drugs you choose, Medicare Part D monthly premium may vary.
| 2022 Medicare Cost | ||
|---|---|---|
| Part XXX | Premium | Deductible and Co-Insurance |
| Part D | $11 (or higher depending on income) | $480, and then 25% up to the initial coverage limit. |
Once you reached the Medicare Part D initial coverage limit, enrollees will receive 75% discount with the credit total meeting your out-of-pocket spending limit. If you want to add Medicare Part D to your Medicare plan, be careful not to be late in enrolling! Failure to enroll during initial enrollment period results in 1% late penalty every month.
Medicare Supplement Insurance Plan (Medigap)
Medicare Supplement Insurance, or best known as Medigap, is a coverage plan that fill in the “gaps” in Original Medicare plan such as copayments, coinsurance, and deductibles. Medigaps may also cover medical care cost outside the U.S.
The cost for this type of Medicare policy depends on your location, the type of plan, and how each insurance company decides on the premium. Medigap policies are priced in 3 ways.
- No age-rated: The same monthly premium regardless of age
- Entry age-rated: Monthly premium based on the age when you buy Medigap
- Attained age-rated: Monthly premium change as you get older
There are 10 Medigap plans available in most states where it covers some or all of the following costs:
| Medicare Benefits | A | B | C | D | F | G | K | L | M | N |
|---|---|---|---|---|---|---|---|---|---|---|
| Part A Coinsurance and Hospital Cost | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| Part B Coinsurance or Copayment | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
| Part A hospice care coinsurance or copayment | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
| First 3 pints of blood | Yes | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
| Skilled nursing facility coinsurance | No | No | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
| Part A deductible | No | Yes | Yes | Yes | Yes | Yes | 50% | 75% | Yes | Yes |
| Part B deductible | No | No | Yes | No | Yes | No | No | No | No | No |
| Part B excess charges | No | No | No | No | Yes | Yes | No | No | No | No |
| Foreign travel | No | No | 80% | 80% | 80% | 80% | No | No | 80% | 80% |
| Out-of-pocket limit | N/A | N/A | N/A | N/A | N/A | N/A | $6,620 | $3,310 | N/A | N/A |
* Plans F and G also offer a high-deductible plan in some states. With this option, you must pay for Medicare-covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of $2,490 in 2022 before your policy pays anything. (Plans C and F aren't available to people who were newly eligible for Medicare on or after January 1, 2020.)
** For Plans K and L, after you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.
*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don't result in inpatient admission.
To enroll in Medigap plan, the important thing you must take note of is you MUST HAVE Medicare Part A and Part B, and SHOULD NOT BE CURRENTLY ENROLLED in Medicare Advantage Plan (Medicare Part C).
How To Apply for Medicare?
You are officially eligible to apply for Medicare 3 months before you turn 65 or 3 months after you turn 65 years old. You can also apply if you have a disability, End-Stage Renal Disease (ESRD), or Lou Gehrig’s disease (ALS). There is a 7-month window of enrollment period, and you should enroll immediately in Medicare Part A and/or Medicare Part B in one of the following ways:
- Online at www.SocialSecurity.gov
- Calling Social Security at 1-800-772-1213, Monday to Friday from 7AM to 7PM
- In person at your local Social Security office
What Is the Best Medicare Plan Coverage?
Original Medicare (Medicare Part A and Part B) and even in addition to Medicare Part D does not cover all health care expenses. Even routine checkup comes with copayments and deductibles that could cost you more than you expected. This is where Medigap kicks in to help.
Medigap Plan F is the most popular plan amongst all Medicare users with comprehensive coverage and average premium at $326. However, Plan F is no longer available for people that are newly eligible to Medicare after January 1, 2020. If you’re already enrolled in a Plan F or were eligible for Medicare before 2020, you can still choose Medigap Plan F.
Medigap Plan G is the next best plan for Medicare users, especially for newbies to Medicare plan. It also offers the same broad coverage as Plan F, except for the Part B deductibles, which is an extra annual premium of $233 in 2022. Medigap Plan G is also cheaper than Plan F at premium as low as $143/month.
What Does Medicare Cover?
Generally, different parts of Medicare cover specific services that they can receive or choose via choosing a Medicare plan: Original Medicare (Part A and B) or a Medicare Advantage Plan (Part C) - and adding additional coverage to fill in the gap (Medigap).
| Medicare Parts | Coverage |
|---|---|
| Part A | Inpatients care in a hospital, skilled nursing facility care, nursing home care, hospice care, home health care. |
| Part B | Doctor office visits, lab tests, MRI’s, outpatient surgery, clinical research, ambulance services, durable medical equipment (DME), mental health (inpatient, outpatient, partial hospitalization), limited prescription drugs. |
| Part C | Part A and Part B coverage, dental, vision, hearing, fitness benefits, prescription drugs (Part D) |
| Part D |
Tier 1: generic prescription drug Tier 2: Preferred, brand-name prescription drug Tier 3: non-preferred, brand-name prescription drug Specialty tier: very high-cost prescription drug |
| Medigap (Plan A, B, C, D, F, G, K, L, M, N) |
Portion, if not all: Medicare Part A coinsurance, hospital fee, hospice coinsurance or copayment cost Medicare Part B coinsurance or copayment cost Blood transfusion (first 3 pints) Also: Skilled nursing facility cost Medicare Part A deductible Medicare Part B deductible Medicare Part B excess Foreign travel emergency medical cost Out-of-pocket limit |
Medicare vs. Medicaid?
Medicare and Medicaid are not the same. Medicare is a government-run program that provides health coverage for Americans over 65 years old or Americans under 65 years old with disability. Medicaid is both state and government-run program that provides health coverage for Americans with lower income.
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InsureBetter.net’s mission is to empower Americans with information they can trust. Our goal is to be a reliable source of educational content regarding Medicare. In addition, we provide details on requirement policies, coverage, and rates from 21+ top insurance companies.
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Data & Rate Estimate Methodology
Medicare cost, deductibles, and income adjustment data are from Medicare.gov. InsureBetter.net analysis and calculation are based on data for 2022 Medicare plans. The cost for Medicare Part D is based on the average of available standard prescription drug plan.
Laura Dwight is an insurance expert and senior writer for InsureBetter.net that has been studying Medicare insurance since 2008. She is dedicated to helping seniors in getting Medicare easily and simplifying ways for seniors to understand and choosing Medicare since their life shouldn’t be as difficult as it is.