Medicare Costs 2023: does everyone pay the same for Medicare?

Medicare is a federal health insurance program that provides coverage for seniors and people with disabilities. It is one of the most popular and important programs in the United States, as it helps millions of Americans access quality health care and protect themselves from high medical bills. According to the latest data, about 63 million people were enrolled in Medicare in 2022, and they spent an average of $6,734 per person on healthcare services.

However, Medicare is not free. Depending on the type of coverage you have, your income, and other factors, you may have to pay different costs for your Medicare benefits. These costs include premiums, deductibles, copayments, coinsurance, and out-of-pocket expenses. They can vary widely among different Medicare options and change each year.

In this article, we will explain how much you pay for each type of Medicare coverage and how your costs vary based on various factors. We will also provide some tips on how to compare different Medicare options and find the best one for your situation.

Medicare Cost Part A: Hospital Insurance

Generally, Medicare Part A covers inpatient hospital care, skilled nursing facility care, hospital stay,hospice care, and some home health care. It is usually the first part of Medicare that you enroll in when you turn 65 or become eligible due to a disability.

Most people do not have to pay a monthly premium for Medicare Part A, as long as they or their spouse have paid Medicare taxes for at least 10 years while working. This is called “premium-free Part A”. However, if you do not qualify for premium-free Part A, you can buy Part A and pay either $278 or $506 each month in 2023, depending on how long you or your spouse worked and paid Medicare taxes.

Even if you do not have to pay a monthly premium for Part A, you still have to pay other costs when you use Part A services. These include:

·        A deductible of $1,556 per benefit period in 2023. A benefit period Medicare starts  when you are admitted to a hospital or skilled nursing facility and ends when you have been out for 60 days in a row.

·        Coinsurance of $389 per day for days 61-90 of each benefit period in 2023. Coinsurance is the percentage of the cost that you pay after you meet your deductible.

·        Coinsurance of $778 per day for days 91 and beyond of each benefit period in 2023. These are called “lifetime reserve days” and you have a total of 60 days that can be used over your lifetime.

·        Coinsurance of $194.50 per day for days 21-100 of skilled nursing facility care in each benefit period in 2023.

·        No coinsurance for hospice care, but you may have to pay a copayment of up to $5 for each prescription drug and 5% of the cost of inpatient respite care. Copays is a fixed amount that you pay for each service or item.

·        No coinsurance for home health care, but you may have to pay 20% of the cost of durable medical equipment such as wheelchairs or walkers.

Medicare Part B in 2023: Medical Insurance

Medicare Part B covers doctor services, outpatient care, outpatient therapy, hospital outpatient, preventive services, lab tests, x-rays, mental health services, ambulance services, and some home health care. It is usually the second part of Medicare that you enroll in when you join Part A.

Unlike Part A, most people have to pay a monthly premium for Medicare Part B. The standard monthly premium for Part B is $164.90 for 2023. However, your actual premium may be higher if you have a higher income. The income that Medicare uses to determine your premium is modified adjusted gross income (MAGI), which is your total adjusted gross income plus tax-exempt interest income.

If your MAGI is above a certain threshold, you will pay an additional amount called the income-related monthly adjustment amount (IRMAA). The IRMAA ranges from $59.40 to $356.40 per month in 2023, depending on your income level and tax filing status. For example, if you are single and your MAGI was more than $88,000 but less than or equal to $111,000 in 2021 (the year that Medicare uses to determine your 2023 premium), you will pay an IRMAA of $59.40 per month on top of the standard premium of $164.90 per month in 2023.

In addition to the monthly premium, you also have to pay other costs when you use Part B services. These include:

·        An annual deductible of $226 in 2023. This is the amount that you have to pay before Medicare begins to pay its share of the costs.

·        Coinsurance of 20% for most Part B services after you meet your deductible. For example, if Medicare approves $100 for a doctor visit, you will pay $20 and Medicare  will pay $80.

·        Copayment or coinsurance for some Part B services, such as outpatient hospital care, outpatient mental health care, and partial hospitalization. The amount you pay may vary depending on the service and the facility.

·        No coinsurance amounts or copayment for most preventive services, such as flu shots, mammograms, and colonoscopies, as long as you see a doctor who accepts Medicare assignment. Assignment means that the doctor agrees to receive the Medicare-approved amount as full payment for the service.

Medicare Part D: Prescription Drug Coverage

Medicare Part D coverage covers prescription drugs that you take at home. It is an optional part of Medicare that you can enroll in if you have Part A and/or Part B. Part D Plans also are offered by private insurance companies that contract with Medicare. You can choose from different plans that vary in costs, benefits, and drug lists.

Like Part B, your monthly premium for Part D may be higher if you have a higher income. The IRMAA for Part D ranges from $12.40 to $77.90 per month in 2023, in addition to your regular Part D Plan premium. For example, if you are single and your MAGI was more than $88,000 but less than or equal to $111,000 in 2021, you'll pay an IRMAA of $12.40 per month on top of your plan premium in 2023.

Besides the monthly premium and the IRMAA, you also have to pay other costs when you use Part D drugs. These include:

·        An annual deductible of up to $480 in 2023 for beneficiaries. This is the amount that you have to pay before your plan begins to pay its share of the costs. Some plans may have a lower or no deductible.

·        Copayment or coinsurance for each prescription drug that you fill. The amount you pay may vary depending on the drug tier, the pharmacy, and whether you use mail order or not. Drug tiers are categories of drugs that have different costs. For example, generic drugs are usually cheaper than brand-name drugs.

·        A coverage gap or “donut hole” for some people. This is a period when you have to pay more for your drugs after you and your plan have spent a certain amount on drugs in a year. In 2023, the coverage gap begins when you and your plan have spent $4,430 on drugs and ends when you have spent $7,050 out-of-pocket on drugs. During the coverage gap, you will pay 25% of the cost for both brand-name and generic drugs.

·        Catastrophic coverage for some people. This is a period when you pay less for your drugs after you have spent a certain amount out-of-pocket on drugs in a year. In 2023, catastrophic coverage begins when you have spent $7,050 out-of-pocket on drugs. During catastrophic coverage, you will pay a small copayment or coinsurance for each drug.

Medicare Advantage: An Alternative Way to Get Medicare Benefits

Medicare Advantage (Part C) is an alternative way to get your Medicare benefits through a private insurance company that contracts with Medicare. Medicare Advantage Plans provide all the benefits of Part A and Part B, and often include extra benefits such as vision, dental, hearing, wellness programs, and prescription drug coverage. Some plans may also offer lower costs than Original Medicare Part A and B.

However, Medicare Advantage Plans may also have different costs than Original Medicare. These costs depend on the plan you choose, the services you use, and whether the plan covers any extra benefits. They may include:

·        A monthly premium that may be higher or lower than the standard Part B premium. Some plans may have no premium at all.

·        A deductible that may be higher or lower than the Part A and/or Part B deductible. Some plans may have no deductible at all.

·        Copayment or coinsurance that may be higher or lower than the Part A and/or Part B copayment or coinsurance. Some plans may have no copayment or coinsurance at all.

·        An out-of-pocket limit that caps the amount that you have to pay for your health care services in a year. Original Medicare does not have an out-of-pocket limit.

·        A network of doctors, hospitals, and other providers that you have to use to get the lowest costs. Some plans may allow you to go out-of-network

·        A formulary of drugs that the plan covers and the costs for each drug. Some plans may have different tiers of drugs that have different costs. Some plans may also have restrictions on how you can get your drugs, such as prior authorization, quantity limits, or step therapy.

·        A star rating that measures how well the plan performs on quality, customer service, and member satisfaction. The rating ranges from one to five stars, with five being the best. You can use the star rating to compare different plans and choose the best one for you.

To enroll in a Medicare Advantage Plan, you must have Part A and Part B, live in the plan’s service area, and not have end-stage renal disease (ESRD), unless you meet certain exceptions. You can join a Medicare Advantage Plan during certain enrollment periods, such as when you are first eligible for Medicare, when you have a special circumstance that allows you to change plans, or during the annual open enrollment period from October 15 to December 7.

Medicare Supplement Insurance: A Way to Fill the Gaps in Original Medicare

Medicare Supplement Insurance (Medigap) is another type of private insurance that helps pay some of the out-of-pocket costs that Original Medicare does not cover, such as deductibles, coinsurance, and copayments. Medigap policies are standardized and regulated by the federal and state governments. They are labeled with letters from A to N, and each letter offers a different level of coverage and benefits.

However, Medigap policies also have different costs than Original Medicare. These costs depend on the policy you choose, the company that sells it, and where you live. They may include:

·        A monthly premium that varies depending on the policy, the company, and your age, gender, health status, and tobacco use. Some companies may offer discounts or lower premiums for certain groups of people, such as non-smokers, married couples, or women.

·        A deductible that may be higher or lower than the Part A and/or Part B deductible. Some policies may have no deductible at all.

·        No copayment or coinsurance for most Part A and Part B services after you meet your deductible. However, some policies may require you to pay a copayment or coinsurance for certain services, such as foreign travel emergency care or Part B excess charges. Excess charges are the difference between what Medicare approves and what the doctor charges.

·        No out-of-pocket limit that caps the amount that you have to pay for your health care services in a year. However, some policies may offer an out-of-pocket limit as an extra benefit.

To enroll in a Medigap policy, you must have Part A and Part B, and you must buy the policy within six months of turning 65 or enrolling in Part B. This is called your Medigap open enrollment period. During this period, you have the right to buy any Medigap policy sold in your state without having to answer any health questions or pay more because of your health status. After this period, you may not be able to buy a Medigap policy or you may have to pay more or wait for coverage.

You cannot have both a Medigap policy and a Medicare Advantage Plan at the same time. If you have a Medigap policy and want to join a Medicare Advantage Plan, you will have to drop your Medigap policy. If you have a Medicare Advantage Plan and want to switch back to Original Medicare and buy a Medigap policy, you may not be able to do so or you may have to pay more or wait for coverage.

How to Compare Different Medicare Options and Find the Best One for You

As you can see, Medicare costs are not the same for everyone. They depend on many factors, such as the type of coverage you have, your income, and your health care needs. Therefore, it is important to compare different Medicare options and find the best one for you.

One way to compare different Medicare options is to use the [Medicare Plan Finder] tool on the official Medicare website. This tool allows you to enter your personal information, such as your zip code, your current coverage, your health status, and your prescription drugs. Then it will show you all the available plans in your area that match your criteria. You can compare the costs, benefits, quality ratings, and customer reviews of each plan. You can also enroll in a plan online or contact the plan directly.

Another way to compare different Medicare options is to talk to a [Medicare counselor] from your [State Health Insurance Assistance Program (SHIP)]. SHIP is a free service that provides unbiased advice and assistance on Medicare issues. You can call or visit a SHIP counselor in your state and ask them any questions you have about Medicare costs and coverage. They can help you understand your options and choose the best one for you.

Conclusion

Medicare is a valuable program that helps millions of Americans access quality health care and protect themselves from high medical bills. However, Medicare is not free. Depending on the type of coverage you have, your income, and other factors, you may have to pay different costs for your Medicare benefits.

In this article, we explained how much you pay for each type of Medicare coverage and how your costs vary based on various factors. We also provided some tips on how to compare different Medicare options and find the best one for your situation.

We’re Here to Help

You do not have to spend hours reading articles on the internet to get answers to your Medicare questions. Give the licensed insurance agents at Golden Years Design Benefits a Call at 1-844-254-8998. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.