Before you enter the world of Medicare, it’s a great idea to estimate what your potential Medicare costs may be.
We have put together a Medicare Cost Worksheet that will help you estimate your costs.
We can also pair you with an agent who can go over this Medicare Cost Worksheet with you if you need help or feel overwhelmed.
The important thing to know is that Medicare costs go beyond monthly premiums. You need to consider the other insurance costs, such as deductibles, copayments, and coinsurance. Also, don’t look past coverage gaps – areas where you’re not covered at all.
Common areas of missing Medicare coverage include:
- Long-term care
- Dental care, including dentures
- Vision care
- Hearing care
- Transportation and lodging costs when you need to receive specialized care in a different area
- Experimental drugs, especially with cancer treatments
- International costs if you travel and need medical care outside of the United States
- Chiropractic care
There are other types of insurances you can choose that will help cover these gaps. You can speak to an agent about these, but most commonly, Medicare enrollees take a hard look at long-term care insurance, Cancer plans, and Medicare Supplements.
Cost of Medicare Part A
Medicare Part is premium-free, meaning you don’t need to pay a monthly cost for being enrolled.
The deductibles and coinsurance are set up as follows:
- $1,316 deductible
- Days 1-60: $0 coinsurance
- Days 61-90: $329 coinsurance
- Days 91+ $658 coinsurance per “lifetime reserve day,” which caps at 60 days
- Beyond lifetime reserve days: You pay all costs
Cost of Medicare Part B
Medicare Part B does have a monthly premium, which is $134 per month as of 2017. If you make more than $85,000 by yourself or $170,000 as a couple, your monthly premium will be higher than that.
|Filing individual tax return||Filing jointly||Filing married & separate||Premium (2017)|
|$85,000 or less||$170,000 or less||$85,000 or less||$134|
The deductible for Medicare Part B is $183 per year. After you meet the deductible, you typically pay 20% of the Medicare-approved amount.
A Medicare Supplement can cover your deductible and coinsurance if you choose to implement one.
Cost of Medicare Part C or Medicare Advantage
Medicare Advantage often lures people in due to its added benefits like low monthly premiums, dental care, eyeglasses, and free gym memberships.
However, be aware that there are hefty deductibles and copayments involved that tend to range from $3,400-$6,700. It’s difficult to switch to a Medicare Supplement once you’re enrolled in Medicare Advantage.
Often times, a Hospital Indemnity plan can help you cover those out-of-pocket costs, but most seniors find original Medicare and a Medicare Supplement is a better deal.
Also know that your plan’s benefits along with your premiums can change from year to year.
Cost of Medicare Part D
Medicare Part D drug costs vary wildly depending on the following factors:
- Which drugs you take
- The plan you choose
- Which pharmacy you go to
In essence, the more drugs you take, the more expensive your premium will be. There are 27 different insurance carriers to choose from, and they all have different prices. You can easily compare what your individual plan would cost by doing a comparison on Medicare.gov.
Please know that a lower monthly premium does not mean a cheaper drug plan. Medicare.gov’s comparisons will show you the total cost for the year, which is what you want to compare. Often times, a drug plan will have a higher premium, but a lower yearly cost.
The other major cost factor is the late enrollment penalty. The window where you may sign up for a drug plan is during your Initial Enrollment Period (the 7-month window around your 65th birthday).
If you choose not to sign up for a Part D drug plan – perhaps you don’t take any prescriptions – the penalty is 1% of the national base beneficiary premium ($35.63 as of 2017) multiplied by the number of months you didn’t have Part D drug coverage (or any other credible coverage). You then round up or down to the nearest 10 cents.
For example, your Initial Enrollment period ended in on May 31 of 2015. You didn’t join Part D until December 7, 2017, which means your drug plan will be effective January 1, 2018. Since you didn’t have drug coverage from June 2015 through December 2017, your penalty is 31% of $35.63.
In sum, you would pay $11 in addition to your regular monthly premium.
Medicare Supplemental Insurance Costs | Medigap Plan Costs
The average cost of Medicare Supplement Insurance varies depending on which plan you choose, how old you are, what gender you are, what your zip code is, and whether or not you’re a tobacco user.
It varies too greatly to display an average dollar amount for everyone here – invariably, you will see large fluctuations from person to person.
Keep in mind that there are a variety of Medigap plans, and the full-coverage plans cost more than the low-coverage plans.
For your reference, here’s a chart showing the Medicare Supplement Insurance comparisons:
|Part A coinsurance and hospital costs up to an additional 365 days after Medicare benefits are used up||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes|
|Part B coinsurance or copayment||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes***|
|Blood (first 3 pints)||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part A hospice care coinsurance or copayment||Yes||Yes||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Skilled nursing facility care coinsurance||No||No||Yes||Yes||Yes||Yes||50%||75%||Yes||Yes|
|Part A deductible||No||Yes||Yes||Yes||Yes||Yes||50%||75%||50%||Yes|
|Part B deductible||No||No||Yes||No||Yes||No||No||No||No||No|
|Part B excess charges||No||No||No||No||Yes||Yes||No||No||No||No|
|Foreign travel exchange (up to plan limits)||No||No||80%||80%||80%||80%||No||No||80%||80%|
* Plan F also offers a high-deductible plan. If you choose this option, this means you must pay for Medicare-covered costs up to the deductible amount of $2,180 in 2015 before your Medigap plan pays anything.
** After you meet your out-of-pocket yearly limit and your yearly Part B deductible, the Medigap plan pays 100% of covered services for the rest of the calendar year.
*** Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don't result in inpatient admission.
Medicare Supplement Cost Comparison
In order to provide you with basic information on Medigap plan costs, here are a few sample rates for various situations and Medigap plans.
For these examples, we assume the person does not use tobacco. These sample rates reflect prices in the state of Kansas.
Also, know that we represent a variety of insurance carriers, so these ranges reflect the carrier with the lowest price up to the carrier with the highest price. The plan is the same no matter which carrier is chosen, and we would almost always put you with the cheapest plan available if it’s possible.
Plan F: $143.61-$332.65 per month
Plan G: $116.45-$300.61 per month
Plan N: $100.39-$238.79 per month
Plan F: $126.75-$289.26 per month
Plan G: $102.78-$261.40 per month
Plan N: $88.61-$207.65 per month