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As of 2020, there were over 62.3 million Medicare subscribers. Therefore, you’ve probably already heard of Medicare, it’s parts, and how confusing it can be with the choice of words like “part A” or “part B.” 

The reason for this is that the U.S Medicare program was structured to meet everyone’s health requirements. This is done by providing coverage that’s specifically tailored to meet people’s demands. 

Different covers come at varying costs or, more preferably, premiums. Let’s take a look at the different Medicare parts and how much each part costs.

What Are The Parts Of Medicare?

Medicare has four parts. Part A, B, C, and D. These different parts help provide varying health insurance services to applicants. Below is a list of the different covers and their premiums:

#1. Medicare Part A ( Hospital Insurance):

Together Medicare Part A and Part B make up what is commonly known as “Original Medicare.” When a person initially applies for Medicare, what they get enrolled in is Part A, which takes care of a large portion of hospital-related expenses. 

Part A covers services like skilled nursing care (SNF), inpatient hospital stay, hospice care for those who are terminally ill, and specific home health care. Beneficiaries are usually required to pay a monthly premium of $458 or $252. The difference in amount depends on how much they might have remitted as Medicare taxes.

However, most people don’t end up paying this cover because they get the premium-free Part A. This is usually the case when you have paid the Medicare tax deductions.

For example, if you or your spouse have worked for ten years or more in the U.S, you’ve already paid for Part A’s Medicare premiums through Social Security taxes. If you haven’t worked that long, you’ll need to pay the Part A premium to buy into the program.

Irrespective, Part A doesn’t totally come without a cost. Medicare charges a whopping sum of $1,408 anytime you are admitted to the hospital. Beneficiaries also get to pay varying coinsurance fees for the different benefit periods.

You can, however, buy a Medigap policy to supplement and cover the costs expended on the Part A hospital inpatient deductible.

#2. Medicare Part B (Medical Insurance):

Medicare Part B makes up for the second half of the Original Medicare. Part B covers lab tests, doctor visits, durable medical equipment (DME), ambulance transportation, diagnostic screenings, and other outpatient services.

Some persons are automatically enrolled in Part B while some need to sign up. If a person doesn’t sign up for Part B when they first become eligible, they’ll have to pay a late enrollment penalty.

In contrast with Part A, which most persons get at no cost, beneficiaries must pay monthly premiums for Part B. The premium depends on a person’s modified adjusted gross income (MAGI). However, the standard premium is $144.60 (or higher depending on your income).

The modified adjusted gross income used will be reported on their IRS tax return from two years ago. If your modified adjusted gross income is more than a certain amount, then you may end up paying more. This extra charge is called an Income Related Monthly Adjustment Amount (IRMAA).

In 2020, beneficiaries get to pay $198 for their Part B deductible. After they have made this payment, they’ll then remit an additional 20% of the Medicare-approved amount for:

If Your Yearly Income In 2018 (for what you’ll pay in 2020) was as follows:

Filed Individual Tax Return

Filed Joint Tax Return

Filed Married and Separate Tax Return

What You’ll Pay Monthly In 2020

$85,000 and below

$174,000 or less

$87,000 or less

$144.60

$87,000 – $109,000

above $174,000 up to $218,000

Not applicable

$202.40

Above $109,000 up to $136,000

above $218,000 up to $272,000

Not applicable

$289.20

above $136,000 up to $163,000

above $272,000 up to $326,000

Not applicable

$376.00

above $163,000 and less than $500,000

above $326,000 and less than $750,000

above $87,000 and less than $413,000

$462.70

$500,000 and above

$750,000 and above

$413,000 and above

$491.60

#3. Medicare Part C

The Medicare Part C is the private health insurance alternative to the federally run Original Medicare (Part A & Part B). It is also known as Medicare Advantage. 

Private health insurance companies are the ones that offer this coverage. Beneficiaries of this plan will have to sign up with a private insurer and also choose a Medicare Advantage plan. That’s not all, they still have to enrol in Part A and Part B. Then they are also expected to pay the premium of Medicare Part B. 

Irrespective of the seemingly tedious rules, Part C, offers a very exhaustive coverage to its users. Some extra benefits of this coverage include prescriptions as well as dental and vision care.

Medicare Part C, or Medicare Advantage, plans often boast no, or low, monthly premiums. Zero dollar Medicare Advantage premiums are available to many. However, some Medicare Advantage options can range up to $100 monthly.

The cost will depend on your benefit choices as well as the private insurance company selling the plan.

To compare benefits and prices, it is easiest to contact a licensed agent. At no cost, an agent can help you find the right balance between Medicare premiums and coverage for your individual needs.

#4. Medicare Part D (Prescription Drug Insurance):

This is the part of the program that pays for certain prescription drugs. Only private insurers offer this plan. Hence, interested parties will need to go through a private insurer to buy the Part D plan.

Part D monthly premium varies by plan. Higher-income beneficiaries may also be required to pay more. You should compare costs specific Part D plans before opting for one. If you’re having trouble with this you can always contact your agent with Healthcare search to help guide you through the process.

Medicare income limits also apply to Medicare Part D. This means that IRMAA may also increase your Part D Medicare premiums. For instance:

2018 Income (Single)

2018 Income (Married)

2020 Part B Adjustment to Monthly Premium

$85,000 or less

$170,000 or less

$0

$87,000 – $107,000

$170,001 – $214,000

$12.40

$107,001 – $133,500

$214,001 – $267,000

$31.90

$133,501 – $160,000

$267,001 – $320,000

$51.40

$160,001 – $499,999

$320,001 – $749,999

$70.90

$500,000 and above

$750,000 and above

$77.40

How Can I Get Help With My Medicare Costs?

Many beneficiaries buy Medicare Supplement insurance, also known as Medigap. Unlike Original Medicare, Medigap is offered by private health insurance firms.

These plans help to cover the out-of-pocket costs that Parts A and B do not cover. Examples of these costs include coinsurance amounts, copays, and deductibles for Parts A and B.

Medigap plans often work alongside Original Medicare, i.e. Parts A and Parts B. These plans are also represented by letters A, B, C, D, F, G, K, L, M, and N. There’s also the option of Extra Help (LIS) also known as Low-Income Subsidy. This subsidy covers those that are enrolled with Medicare Part D.

LIS can help in paying for certain out-of-pocket prescription drug costs. Examples include deductibles, copayments, and premiums up to around $4,000 annually.

Those having limited income could also subscribe to other available Medicare Savings Program. These programs are designed to also help with out-of-pocket costs that might arise. The four Medicare Savings Program are: 

  • Qualified Medicare Beneficiary (QMB) Program: The Qualified Medicare Beneficiary program covers Part A and B premiums and some other out-of-pocket costs that may arise.
  • Specified Low-income Medicare Beneficiary (SLMB) Program: The Specified Low-income Medicare Beneficiary program is designed explicitly to cover Part B premiums.
  • Qualified Individuals (QI) Program: This program offers financial assistance to subsidize payments for Medicare Part B premiums.
  • Qualified Disabled and Working Individuals (QDWI) Program: This is a less known program. Each state’s Medicaid program usually administers it. The QDWI program pays Part A premiums for working disabled under the age of 65.

Healthcare search can help you guide you through the intricacies of cutting down on your Medicare costs. 

Choosing the Right Medicare Coverage

It’s always tempting to cut down on cost, especially if you’re working on a tight budget. You should, however, remember that while the lowest Medicare premiums might save you initial funds, you just might end up spending more on deductibles, uncovered medical services, and out-of-pocket costs. 

If you need extra guidance settling for a Medicare part–one that gives you full coverage and at lesser cost, you can contact Healthcare Search at 📞 (985) 273-5822.

We’ll be sure to provide you with a personal agent nearby who’ll walk you through the process. We do hope you’ll get across!

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