Josh Hountz

If you’re new to Medicare, you’ll soon learn that each part (A, B, C, and D) provides a different set of health insurance benefits. You probably also learn that Medicare premiums are different for each part, too. But how different are they? Find out what each part of Medicare might cost you by reading below.

Medicare Part A Premiums (for Hospital Insurance)

The first part of Original Medicare, Part A covers hospital visits, skilled nursing care, home health care, and hospice care. For most, Medicare Part A comes at no additional cost. This is because most adults have already paid for Medicare Part A. How? Well, if you or your spouse have worked 40 quarters (10 years) or more in the United States, you’ve already paid for Part A’s Medicare premiums through Social Security taxes.

If you haven’t worked for at least 40 quarters in the U.S., you will have to pay a premium for Part A coverage. You can buy into Part A, but premiums could be around $400 per month.

Medicare Part B Premiums (for Medical Insurance)

The second half of Original Medicare, Part B covers doctor visits, preventive services, diagnostic testing, and durable medical equipment (DME). Most elect to enroll in Part B. For the majority of seniors, Part B will cost $104.90 per month. However, the Part B Medicare premium can increase based on your annual income. The possible increase is called the “Income Related Monthly Adjustment Amount (IRMAA).” IRMAA is calculated based on your income 2 years prior to the adjustment year. For example :

2013 Income (Single) 2013 Income (Married) 2015 Part B Adjustment
to Monthly Premium
$85,000 and below $170,000 and below $0
$85,001 – $107,000 $170,001 – $214,000 $42
$107,001 – $160,000 $214,001 – $320,000 $104.90
$160,001 – $214,000 $320,001 – $428,000 $167.80
$214,001 and above $428,001 and above $230.80

Medicare Part C Premiums

Medicare Part C is an alternative choice to Original Medicare. You do not lose your Part A and Part B coverage, and you are still responsible for your Part B premiums. However, you have comprehensive coverage that eliminates the need for a Medicare Supplement plan.

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 to you, an agent can help you find the right balance between Medicare premiums and coverage for your individual needs.

Medicare Part D Premiums (for Prescription Drug Insurance)

Medicare Part D provides coverage for prescription medications, Medicare Part D, like Part C, is sold by private insurance companies. Premiums are low, ranging around $15 – $100 in most areas depending on coverage options. Medicare income limits also apply to Part D, meaning that IRMAA may also increase your Part D Medicare premiums. For example :

2013 Income (Single) 2013 Income (Married) 2015 Part B Adjustment
to Monthly Premium
$85,000 and below $170,000 and below $0
$85,001 – $107,000 $170,001 – $214,000 $42
$107,001 – $160,000 $214,001 – $320,000 $104.90
$160,001 – $214,000 $320,001 – $428,000 $167.80
$214,001 and above $428,001 and above $230.80

Medicare Supplement (Medigap) Premiums

Medicare Supplement plans, often called Medigap plans, are often paired with Original Medicare (Parts A and B). Medigap Plans are also organized by letter (A, B, C, D, F, G, K, L, M, and N). By purchasing a supplementing Medigap plan, seniors can help mitigate many of the out-of-pocket costs left after Original Medicare coverage. For example, many Medigap plans cover coinsurance amounts, copays, and deductibles for Parts A and B.

Medigap Plan Comparison1

A comprehensive list of Medigap plans and what they pay

Because Medigap plans are sold by private insurance companies, and there are different levels of coverage between the plans, prices vary. While this may not reflect the prices you see available in your area exactly, the national average for a Medigap plan is around $183 per month.

Help With Medicare Premiums

There are several programs available to help seniors pay for their Medicare premiums. Some of these programs can also cover copayments, coinsurance, and deductibles. While these programs may not cover all of your medical expenses, they can certainly help.

Extra Help (LIS): This subsidy helps cover Medicare Part D (prescription drug coverage) costs. It can be applied to deductibles, copayments, and premiums up to around $4,000 annually.

Qualified Medicare Beneficiary (QMB) Program: This program can help cover Part A and B premiums and out-of-pocket costs (deductibles, coinsurance, and copayments).

Specified Low-income Medicare Beneficiary (SLMB) Program: This program can help cover Part B premiums.

Qualified Individuals (QI) Program: This program can help cover Part B premiums.

Qualified Disabled and Working Individuals (QDWI) Program: This program can help working disabled people less than 65 years old and those who have lost their Medicare Part A premium-free coverage by going back to work. It helps cover Part A premiums.

To see if you are eligible for any of these programs, please give me a call.

Deducting Medicare Premiums

While I (and other licensed agents) cannot give you tax advice, it is possible to deduct medical expenses on your yearly tax returns. In order to take advantage of these deductions, you must use an itemized deductions form. These deductions can include things like medical insurance premiums, hospital insurance premiums, Part D premiums, and medical service fees. Dental and vision services are also possible tax deductions.

Choosing the Right Medicare Coverage

Saving money may seem tempting on a fixed budget. However, selecting the lowest Medicare premiums may end up costing you more when it comes to deductibles, out-of-pocket costs, and uncovered medical services. Instead of wasting your time searching on your own, give me a call today.

Or, if you want to learn more about Medicare, check out HealthMarkets’ Guide to Medicare. It includes all the information you need to get a bearing on Medicare’s confusing ABCs.

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References

1 Based on 2015 costs

2 Plan F also offers a high-deductible plan in some states. If you choose this option, this means you must pay for Medicare-covered
costs (coinsurance, copayments, deductible amount of $2,180 in 2015 before your policy pays anything).

3 For Plans K and L, after you meet your out-of-pocket yearly limit and your yearly Part B deductible ($147 in 2015), the Medigap plan
pays 100% of covered services for the rest of the calendar year. The 2015 out-of-pocket limits for plans K & L are $4,940 and $2,470,
respectively.

4 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 an inpatient admission

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