5 Medicare Expenses You May Not Expect
Table of Contents:
Here are five Medicare costs you need to know about:
Part B Premiums
Though Medicare Part A, which covers hospital care, is free for most enrollees, Part B, which covers doctor visits and diagnostic services, charges enrollees a premium that can change from year to year. For 2019, the standard Part B premium is $135.50 per month.* Higher earners, however, pay more than the standard premium.
If you’ve had health insurance before, you’re probably familiar with deductibles — the amount you’re required to pay before your provider will cover your medical expenditures. Unfortunately, deductibles come into play with Medicare expenses, too.
Under Part A, you’re currently liable for a $1,364 deductible per benefit period during which you require hospital or skilled nursing care. Each benefit period starts the day such care begins and ends once you have not received inpatient hospital or skilled nursing care for 60 days in a row. This means you may be liable for more than one Part A deductible in the same year. Additionally, Part B currently comes with an annual deductible of $185.*
When you receive care under Medicare, you’re required to share in its cost, even after your deductible has been met. If you’re receiving hospital care under Part A, there’s no coinsurance for your first 60 days of care, but from days 61 to 90, you pay $341 in coinsurance per day, per benefit period. And for days 91 and beyond, you pay $682 in coinsurance per day for up to 60 days over your lifetime.*
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Meanwhile, if you’re receiving skilled nursing care, there’s no coinsurance for your first 20 days. From days 21 through 100, your coinsurance is $170.50 per day. Medicare will only cover 100 days in a skilled nursing facility, so coinsurance doesn’t come into play past that point.**
Also known as Medigap, supplemental insurance will pick up the tab for some of your out-of-pocket costs under Medicare, like coinsurance and deductibles. There are 10 different Medigap plans to choose from, so your cost will depend on the coverage you choose.
Late Enrollment Penalties
Your initial Medicare enrollment period begins three months before the month of your 65th birthday, and ends three months after that month. If you don’t sign up during that window, you’ll risk a late Part B enrollment penalty that raises your premium costs by 10% for each 12-month period you delay coverage after becoming eligible.
There are also late enrollment penalties associated with Part D drug plans. These apply if you go without prescription coverage for 63 days or more following your initial enrollment window.
Healthcare will likely be one of your greatest expenses in retirement. Knowing what costs to expect from Medicare will help you budget accordingly.
* Anonymous, (2019). Medicare costs at a glance. The Office U.S. Government Site for Medicare. Retrieved September, 2019
** Anonymous, (October, 2018). 2019 Medicare Parts A & B Premiums and Deductibles. Center for Medicare & Medicaid Services. Retrieved September, 2019