Medicare is a very essential part of handling hospital bills for people who are 65 and above and those who are disabled. However, not everything is covered by these plans and one needs to be aware of the out of pocket costs of Medicare.
Medicare benefits come with premium costs. On an average, Medicare beneficiaries pay a monthly premium of $134 as per 2018. However, the premium amount is set differently for different beneficiaries. High income beneficiaries pay a higher premium whereas some social security beneficiaries pay lower premiums.
Deductible and coinsurance.
Medicare Part B has a $183 deductible as per 2018. Post this amount, the beneficiaries are required to cover 20 percent of their doctor’s service costs. No limit is set on the amount you might need to pay from your own pocket so these extra charges can amount up to big numbers in case of frequent need of health services. Some preventive screening and regular health visits once a year is allowed by the Medicare plans. However, in case of detection of any problem during these visits, following medical services will require you to pay additional costs.
Long Hospital stays.
In case of hospitalisations, Medicare part A has a $1,340 deductible. The cost of hospital stays increases with increasing number of days. For first 60 days, the hospitalisation charges are covered but for days 61 to 90, you need to pay $335 per day. This cost increases to $670 after that period for next 60 lifetime reserve days. After you have exhausted these days as well, you have to pay your hospital costs on your own.
Supplemental insurance plans.
Some people choose to take additional Medicare Supplement Plan to cover the additional costs that original Medicare plan doesn’t cover. These plans need you to pay additional premiums but make your post retirement hospital expenditure more predictable. The other option taken up by people is Medicare Advantage Plan. This plan makes you eligible to receive Medicare part A and B benefits through a private insurance plan in place of the original Medicare.
Prescription drug coverage.
Each prescription drug coverage plan provides with varying prices and coverage. An average plans charge is $33.50 per month as per 2018 and is permitted to charge additional deductibles of up to $405. An annual change in prices and covered medications demands for a careful analysis and comparison of different plans every year to get the best benefits for least money.
The first enrolment period of seven-months begins three months prior to your 65th birthday. An inability to enrol during this period results in late enrolment penalty if you are enrolled with Medicare. If you aren’t a part of Medicare because of your enrolment in group health insurance provided to you through your or your spouse’s job then it is necessary to sign up for Medicare within a time span of eight months post resignation or retirement to dodge these penalty charges.
Excluded Medical Services.
You will need to budget for commonly needed medical services that original Medicare doesn’t cover, including eyeglasses, contact lenses, dental care and hearing aids. Most significantly, Medicare only covers up to 100 days of nursing home care, after which you will become responsible for further long-term care costs.