So you are getting ready for Medicare and thinking healthcare is finally going to be affordable and I can get more coverage…. In this article we will break down the basic cost of Medicare benefits and why some people pay more or less for Part B.
https://www.medicare.gov/your-medicare-costs
-Everyone pays a Medicare Part B premium regardless of your added coverage or Medicare Advantage plan. Part A is usually a $0 premium because of work eligibility and begins on the first day of the month your were born in the year you turn 65. Some may get their Medicare card automatically if they are receiving SSIB – Social Security Income Benefits.
Medicare Part B standard premium for 2021 is $148.50 a month. This premium amount is determined by filing status and income two years prior. *If your income falls below your STATE level for MEDICAID eligibility your Part B premium may be less because STATE welfare benefits are applied. Otherwise if your income exceeds certain levels you will pay MORE for your Part B premium. Here is the chart:
| Beneficiaries who file
individual tax returns with income: |
Beneficiaries who file
joint tax returns with income: |
Income-related monthly adjustment amount | Total monthly premium amount |
| Less than or equal to $88,000 | Less than or equal to $176,000 | $0.00 | $148.50 |
| Greater than $88,000 and less than or equal to $111,000 | Greater than $176,000 and less than or equal to $222,000 | 59.40 | 207.90 |
| Greater than $111,000 and less than or equal to $138,000 | Greater than $222,000 and less than or equal to $276,000 | 148.50 | 297.00 |
| Greater than $138,000 and less than or equal to $165,000 | Greater than $276,000 and less than or equal to $330,000 | 237.60 | 386.10 |
| Greater than $165,000 and less than $500,000 | Greater than $330,000 and less than $750,000 | 326.70 | 475.20 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | 356.40 | 504.90 |
Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:
| Beneficiaries who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses: | Income-related monthly adjustment amount | Total monthly premium amount |
| Less than or equal to $88,000 | $0.00 | $148.50 |
| Greater than $88,000 and less than $412,000 | 326.70 | 475.20 |
| Greater than or equal to $412,000 | 356.40 | 504.90 |
This is your FIRST COST assuming a standard income $148.50 a month. This amount may be paid quarterly by invoice or monthly from SSIB or EFT.
Next consider the Part D or PDP or ‘formulary’ plan you are encouraged to purchase whether you take medicines or not. If you do not enroll within 63 days of losing other CREDIBLE coverage then want it later, you will have a lifetime penalty. More about that here: Keep Creditable Prescription Drug Coverage, Avoid Part D Late Enrollment Penalty | Medicare
If you choose to do a Part D plan, i recommend Wellcare PDP, it is one of the cheapest @ approx $15 a month(MN)). Wellcare – AMY NIELSEN (wellcarerep.com)
So figure around $15 a month for Part D. You will have co-pays depending on the TIER of medicine you take. Assuming TIER 1 & 2 medicines, they are usually $0.
BREAK OUT: MEDICARE ORIGINAL w/ PDP:
Medicare Original Part B premium $ 148.50 *Assuming standard income
Part D (formulary) premium $ 15
TOTAL for Medicare Original and PDP = $ 163.50 a month
Add a SUPPLEMENTAL Insurance Plan to Medicare Original
Insurance companies offer ADDED coverage for what Medicare Original does not cover; like the Part A deductible of $ 1,480 per benefit period, and the 20% of covered medical expenses you are responsible for.
‘Medigap’ or supplemental insurance covers your portion of Medicare Original. It is called MediGAP for a reason, because it fills the gaps Medicare does not pay for. Medigap policies are standardized, and in most states are named by letters, Plans A-N. Compare the benefits each plan helps pay for and choose a plan that covers what you need.
Medigap in Minnesota
If you live in Minnesota, you have guaranteed issue rights to buy a Medigap policy, but the policies are different.
Basic benefits
- Inpatient hospital care: covers the Part A coinsurance
- Medical costs: covers the Part B coinsurance (generally 20% of the Medicare-approved amount)
- Blood: covers the first 3 pints of blood each year
- Part A hospice and respite care cost sharing
- Parts A and B home health services and supplies cost sharing
Medigap plans
The Basic and Extended Basic benefits are available:
- When you enroll in Part B
- Regardless of your age or health problems
You’ll get another 6-month Medigap Open Enrollment Period if both of these apply:
- You return to work.
- You drop Part B to elect your employer’s health plan.
You’ll get this open enrollment period after you retire from that employer when you can elect Part B again.
Basic Plan
Covers:
- Basic benefits
- Part A: skilled nursing facility (SNF) coinsurance (provides 100 days of SNF care)
- 80% of foreign travel emergency
- 50% of outpatient mental health
- Medicare-covered preventive care
- 20% of physical therapy
- State-mandated benefits (diabetic equipment and supplies, routine cancer screening, reconstructive surgery, and immunizations)
Doesn’t Cover:
- Part A: inpatient hospital deductible
- Part B: deductible
- Usual and customary fees
- Coverage while in a foreign country
Extended Basic Plan
Basic benefits:
- Basic benefits
- Part A: inpatient hospital deductible
- Part A: skilled nursing facility (SNF) coinsurance (provides 120 days of SNF care)
- Part B: deductible**
- 80%* of foreign travel emergency
- 50% of outpatient mental health
- 80%* of usual and customary fees
- Medicare-covered preventive care
- 20% of physical therapy
- 80%* of coverage while in a foreign country
- State-mandated benefits (diabetic equipment and supplies, routine cancer screening, reconstructive surgery, and immunizations)
* The plan pays 100% after you spend $1,000 in out-of-pocket costs for a calendar year.
**Coverage of the Part B deductible will no longer be available to people who are new to Medicare on or after January 1, 2020. However, if you were eligible for Medicare before January 1, 2020 but not yet enrolled, you may be able to get this benefit.
Compare these plans side-by-side
If a “yes” appears, the plan covers the described benefit 100%. If a row lists a percentage, the policy covers that percentage of the described benefit. If a “no” appears, the policy doesn’t cover that benefit.
| Medigap Benefits | Medigap Plans | |
|---|---|---|
| Basic Plan | Extended Basic Plan | |
| Basic benefits | Yes | Yes |
| Part A: inpatient hospital deductible | No | Yes |
| Part A: skilled nursing facility coinsurance | Yes (Provides 100 days of SNF care) | Yes (Provides 120 days of SNF care) |
| Part B: deductible** | No | Yes** |
| Foreign travel emergency | 80% | 80%* |
| Outpatient mental health | 50% | 50% |
| Usual and customary fees | No | 80%* |
| Medicare-cover preventative care | Yes | Yes |
| Physical therapy | 20% | 20% |
| Coverage while in a foreign country | No | 80%* |
| State-mandated benefits (diabetic equipment and supplies, routine cancer screening, reconstructive surgery, and immunizations) | Yes | Yes |
* The plan pays 100% after you spend $1,000 in out-of-pocket costs for a calendar year.
**Coverage of the Part B deductible will no longer be available to people who are new to Medicare on or after January 1, 2020. However, if you were eligible for Medicare before January 1, 2020 but not yet enrolled, you may be able to get this benefit
Important plan information
Minnesota versions of Medigap Plans K, L, M, N are available. Minnesota versions of high-deductible F are available to people who had or were eligible for Medicare before January 1, 2020.
Insurance companies can offer 4 additional riders that can be added to a Basic Plan. You may choose any or all of these riders to design a Medigap policy that meets your needs:
- Part A: inpatient hospital deductible
- Part B: deductible**
- Usual and customary fees
- Non-Medicare preventive care
**Coverage of the Part B deductible will no longer be available to people who are new to Medicare on or after January 1, 2020. However, if you were eligible for Medicare before January 1, 2020 but not yet enrolled, you may be able to get this benefit.
Cost ranges from $70 to $250+ a month.
BREAK OUT: MEDICARE ORIGINAL w/ PDP PLUS Supplemental (Medigap)
TOTAL for Medicare Original and PDP $ 163.50
High Deductible Medigap $ 70.00
TOTAL for Medicare Original, PDP and Supp = $ 233.50 a month
Or Enroll in PART C – Medicare Replacement
Insurance companies want you to choose the Part C Medicare replacement plans also known as Medicare Advantage, hence the mail you may be now receiving, and the television commercials. These plans start at $0 premium and look a lot like group health coverage because they offer added benefits for rx, vision, dental and hearing, more. This is where a broker can help evaluate the best plan for your needs, and don’t be sold an attractive premium that costs more out of pocket with co-pays.
BREAK OUT: for Medicare Advantage (Part C)
Medicare Original Part B $ 148.50 *Assuming standard income
Part C (includes formulary) $ 49 (average cost)
TOTAL for Part C = $ 197.50 a month
For more information and details, please reach out calendly.com/amy-n