The State You Retire in Can Affect Your Medicare Costs
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Medicare provides critical health benefits to millions of Americans, and while it is a federally run program, the state you live in could impact the price you pay for it and the type of plan that’s made available to you.
Original Medicare is composed of a few distinct parts: Part A covers hospital care, Part B covers diagnostic and preventive care, and Part D covers prescription drugs. Parts A and B offer the same coverage and cost the same amount, regardless of the state you retire in. Most enrollees, in fact, don’t pay a premium for Part A, while the standard monthly Part B premium, at present, is $135.50 per month.* That figure could go up, however, if you’re a higher earner, but the thresholds at which that’ll happen are set at the federal level; the state you live in won’t impact your costs under Part B.
On the other hand, where you live in retirement could affect your Part D costs. That’s because there’s a discrepancy in Part D plan availability and pricing from state to state. Unlike Parts A and B, you get to choose your coverage under Part D. Some states, however, offer a larger number of Part D plans than others, which can impact your scope of coverage. You should also know that premium-free Part D plans do exist for lower-income seniors; but some states offer more of these than others.
Medicare Advantage Plans
You don’t have to enroll in original Medicare during retirement. Instead, you can opt for a Part C Medicare Advantage plan, which will be your all-in-one health plan. However, as is the case with Part D, the cost and availability of Medicare Advantage plans can vary from one state to another.
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For example, HealthMarkets published its rankings of all 50 states based on the average cost of Medicare Advantage plans in 2019. It found that Nevada offered the most affordable plans for seniors, followed by Iowa, California, Rhode Island, and Florida to round out its top five. By contrast, Mississippi was the most expensive state for Medicare Advantage plans, followed by Washington, D.C., Maryland, West Virginia, and New Jersey.**
If you’re planning to enroll in original Medicare, you may opt to purchase a Medigap plan to serve as supplemental insurance. Medigap can pick up the cost of certain expenses you’ll incur under Medicare, like deductibles and coinsurance, thereby making your healthcare costs more predictable. The cost of a Medigap plan, however, can vary from state to state as well. Switching from one Medigap plan to another is also easier in some states than it is in others.
Know Your Costs
The takeaway? Do some research on Medicare costs before deciding where to retire, and take that data into account when choosing a state to call home during your golden years. Just as importantly, be sure to compare plan options within the state you do land on, as premium costs and scope of coverage can certainly vary to quite a large extent.
Get specific information about coverage in your state at Medicare Resources.
* Anonymous, (October, 2018). 2019 Medicare Parts A & B Premiums and Deductibles. Center for Medicare & Medicaid Services. Retrieved September, 2019
** Anonymous, (2019). The Medicare Advantage Costs Index. HealthMarkets. Retrieved September, 2019