May 26th, 2017 Medicare
Here is the snapshot of various costs associated with medicare insurance. We can divide the various costs in two broad categories. First is Premiums, which you pay at the time of taking the insurance and second is out-of-pocket expenses (deductibles, co-payments, co-insurance) which you pay while availing the medical services.
This medicare insurance is for hospital stay and other inpatient services. Refer to Medicare Part-A for more information.
You usually don’t pay a monthly premium for Medicare Part A (Hospital Insurance) coverage if you or your spouse paid Medicare taxes while working. This is sometimes called “premium-free Part A” and most people get premium-free Part A. If you are not eligible for premium-free Part-A then you’ll have to pay the premium for part-A coverage. The premiums will be as per the table below –
|Duration for which medicare taxes are paid||You pay (per month)|
|Equal or more than 40 quarters||$0 (Premium-free)|
|Less than 30 quarters||$413|
Part-A Hospital Inpatient Deductibles And Coinsurance
|Deductibles (2017)||You pay $1,316 for each benefit period|
|Coinsurance (2017)||Days 1-60||$0 for each benefit period|
|Days 61-90||$329 for each benefit period|
|Days 91 and beyond||$658 coinsurance per each “lifetime reserve day” after day 90 for each benefit period|
|Beyond lifetime reserve days||All costs|
This part of medicare is for paying doctor’s fees and other out-patient services. Refer to Medicare Part-B for more information.
The standard Part B premium for 2017 is $134, however, it can be more for high income individuals. Also, most people who get Social Security benefits will pay less than this amount ($109 on average). You pay a premium each month for Part B. If you get Social Security, Railroad Retirement Board, or Office of Personnel Management benefits, your Part B premium will be automatically deducted from your benefit payment.
Part-B Premium Based On Your Income
|File individual tax return||File joint tax return||File married & separate tax return||You pay each month (in 2017)|
|$85,000 or less||$170,000 or less||$85,000 or less||$134|
|above $85,000 up to $107,000||above $170,000 up to $214,000||Not applicable||$187.50|
|above $107,000 up to $160,000||above $214,000 up to $320,000||Not applicable||$267.90|
|above $160,000 up to $214,000||above $320,000 up to $428,000||above $85,000 and up to $129,000||$348.30|
|above $214,000||above $428,000||above $129,000||$428.60|
You pay $183 per year for your Part B deductible. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you’re a hospital inpatient), outpatient therapy and durable medical equipment.
This insurance includes benefits of both part-A and part-B but offered by private insurance companies. Refer to Medicare Part-C for more information.
You will have to pay a monthly premium (in addition to your Part B premium, although many MA plans comes with $0 monthly premiums). Most medicare advantage plans use a combination of deductibles, co‑insurance and co‑payments to share the costs of care with you. Deductibles, co-pays and co-insurance, plus all costs for ‘services that aren’t covered’ are called “out-of-pocket costs”. Each plan sets its own premium and decides on cost sharing terms. Plans are required to limit the amount you may have to pay out-of-pocket each year. Co-insurance plans set their own co-insurance terms and percentages. The amount you pay for Part C deductibles, co-payments, and/or coinsurance varies by plan and you should check them prior to opting the plan.
This part includes coverage of prescription drugs costs. Refer to Medicare Part-D for more information.
Most Medicare Prescription Drug Plans are provided by private insurance firms which charge a monthly fee that varies by plan. Also, there is a additional premium if you are in the higher income group as shown in the table below. You pay this in addition to the Medicare Part B premium. There will also be a late enrollment penalty which is calculated by multiplying 1% of the national base beneficiary premium ($35.63 per month) by the number of full months you didn’t have Medicare Part D or creditable coverage. That penalty is added to your monthly Medicare Part D premium. The national base beneficiary premium may increase each year, so your late enrollment penalty may likewise increase each year.
Part-D Premiums By Income
|File individual tax return||File joint tax return||File married & separate tax return||You pay (in 2017)|
|$85,000 or less||$170,000 or less||$85,000 or less||your plan premium|
|above $85,000 up to $107,000||above $170,000 up to $214,000||not applicable||$13.30 + your plan premium|
|above $107,000 up to $160,000||above $214,000 up to $320,000||not applicable||$34.20 + your plan premium|
|above $160,000 up to $214,000||above $320,000 up to $428,000||above $85,000 up to $129,000||$55.20 + your plan premium|
|above $214,000||above $428,000||above $129,000||$76.20 + your plan premium|
The annual deductible for a standard Medicare Part D Prescription Drug Plan is a maximum of $400. Medicare Prescription Drug Plans may have a lower deductible than that or even have a $0 deductible. Premiums and deductibles may vary depending on the specific Medicare plan option you select. Most people only pay their Part D premium with no out-of-pocket expenses for medicines.