Today’s question is “What does Medicare cost?”
It’s on a lot of people’s minds as they prepare to enroll in Medicare, but it’s also a question that does not have one consistent answer. Purchasing Medicare isn’t like going to the grocery store, where every item has a specific price.
In a way, determining your Medicare costs is more like buying a new car — without having to deal with the car salespeople. The options you want, the cash you have on hand, or even where you buy your vehicle — each of these can have an impact on the price you pay.
For Medicare, factors that impact your costs include which parts of Medicare you’ll want to receive, how many years you’ve worked, how much money you earn, and whether you’ve chosen Original Medicare, which is administered by the government, or a private Medicare Advantage plan, which is offered by insurers throughout the country.
To take you through the costs of Medicare, we’re going to call on our good friend Gary. Gary’s parents both recently turned 65 years old. And in addition to giving them new golf clubs for their birthdays, Gary volunteered to help them sort out the sometimes confusing costs of Medicare.
Here’s what Gary found out.
First, he and his parents got acquainted with the various parts of Medicare from A through D. Once they were up to speed on all that Medicare could offer, they went to work figuring up the costs.
Since both of Gary’s parents worked for more than 10 years, Medicare Part A, which covers hospital stays, didn’t cost his parents a penny. If they had worked less than 10 years, they would have had to pay a monthly premium. Even with Medicare Part A, however, if Gary’s parents have to stay in a hospital, they’ll have to pay a deductible. But hospital deductibles for Medicare Part A don’t work the same way as the deductibles in Gary’s health plan.
Under Medicare, Gary’s parents would have to pay the deductible each time they were admitted to the hospital. And the cost would depend on the amount of time they stayed. So Gary and his parents decided they should come up with a financial backup plan in case someone ever required multiple hospital stays.
For Medicare Part B, which covers physician visits, outpatient procedures, and other services, Gary’s parents will have to pay a monthly premium. The premium is about the same for most people. There is also a small deductible with Medicare Part B.
To save money, Gary suggested his parents choose doctors and healthcare providers who “accept assignment,” which means those medical professionals accept the amount that Medicare pays for a visit or service. If Gary’s parents choose a physician who charges more, they will have to pay the difference. Gary’s parents could also choose to have their Medicare Part B covered by a private insurer through a Medicare Advantage plan.
For Medicare Part D, which is the prescription drug section of Medicare, once again, Gary’s parents would have to pay a monthly premium. Medicare Part D is not available through the federal government, but only through private insurers. To figure out the best alternative, Gary and his parents compared the different plans’ costs based on the prescription drugs they would need. They also found out that if they do not enroll in a Part D plan when they first become eligible, they might be subject to a premium penalty if they decide to enroll later.
Once Gary sat down with his parents, it was easier for all of them to make decisions. They now know that Medicare Part A would not require a monthly premium, but Parts B and D would. In addition, they all decided they should look into purchasing supplemental insurance to cover services not covered by Medicare.
Although Gary and his parents are a good example of how to get started determining your Medicare costs, we admit it will take you a bit more time and research than what we can cover in this short video. One great online resource to help you is [medicare.gov](http://www.medicare.gov). You can also visit the websites of various insurance companies. And, like Gary’s parents, you can enlist your family members and friends to get their input.
So to sum up, there are some set costs for Medicare, but also some variations. Medicare Part A is free, but you’ll need to pay a deductible for hospital stays. You’ll also need to pay monthly premiums for Parts B and D coverage. And there are exceptions for all the various Medicare plans, so make sure you do your research or talk to someone who can help.
And finally, relax. If you take your Medicare decisions one step at a time, the process isn’t that difficult. So until next time, stay smart and stay healthy.