Cost is usually one of the first questions that people have about Medicare. Fortunately, there are options for customers on the medium and lower income levels so they won’t be overwhelmed or surprised when their Medicare bill comes in the mail. Here’s what you can expect from Medicare billing to keep your payments under control.
Medicare Part A and B Premiums
When most people talk about Medicare, they’re typically referring to Medicare Parts A and B. Medicare Part A covers hospital visits, and there isn’t typically a monthly fee for this coverage as long as you or your spouse have worked at least 10 years in the United States and have paid Medicare taxes throughout. However, if you haven’t worked and paid Medicare taxes for the past 10 years, then you could pay more than $400 per month for Medicare Part A.
Medicare Part B covers doctor visits, tests, and other services typically covered by health insurance. Each month, you’re expected to pay a premium that depends on your income from two years before to cover Part B costs. As of 2017, the income breakdown falls on these lines:
- If you made less than $85,000 in 2015, you can expect to pay around $105 per month.
- If you made more than $85,000 in 2015, you can expect to pay between $150 and $350, depending on your income and any other household income.
The Medicare cost scale ensures that people on the lower income scale are able to pay what they can afford, while customers with the income can continue to support the system with higher premiums.
Understanding Copays and Coinsurance
It’s important to remember that your monthly Medicare payments aren’t the only medical expenses that come with health care. While you’re budgeting how much you should set aside each month for health insurance, make sure you’re adding an extra 30 percent for unexpected medical costs. You never know when your next hospital visit will be and when you’ll need to have money saved in case you need treatment.
The two most common costs that you will experience during your doctor and hospital experiences are copays and coinsurance. Even with a Medicare assignment (when the provider accepts Medicare), you’ll need to help cover the cost of treatment. Copays are a fixed amount that come with medical services. For example, a doctor visit may require a $30 copay. You can expect to pay that flat fee each time you see the doctor.
Coinsurance covers a percentage of the cost. For example, if you receive medical treatment that costs $2,500, you should expect to pay 20 percent of the cost — in this case $500. While 20 percent is standard, some forms of insurance will cover more (meaning you pay 10 to 15 percent), while others cover less (meaning you pay 25 to 30 percent). Check to see exactly what your coinsurance percentage is before you agree to a plan. Medicare typically covers the majority of health care expenses, but it’s important to keep money saved for when you receive your coinsurance bill.
Reaching Your Deductible
Another common component among insurance options is a deductible. The deductible is the amount you pay before your plan starts paying. For example, you might have a $150 deductible that you pay before your plan covers your costs.
For example, if you receive a medical bill for $200, then you will pay the first $150 as part of your deductible. After that, everything else is paid through coinsurance. In this example, that’s the remaining $50. If the patient pays 20 percent in coinsurance, then they would need to pay $10 out of the $50, so the final bill for the patient would be $160 out of $200. However, once your deductible is met, you will not have to pay it again on any future visits for the rest of the year. Your deductible resets each calendar year.
Among copay, coinsurance, and deductibles, the hardest part of calculating your medical costs is understanding what the language means. Once you have a firm grasp on the types of costs you can experience at the doctor, you can start to budget for them accordingly. This will reduce the bill surprise when your treatment costs and bills come in the mail.
Each year, Medicare costs are adjusted, so it’s important to evaluate your costs annually so you can set aside an appropriate budget for your bills. If you are experiencing bill surprise and aren’t sure why your bill is so high, contact United Medicare Advisors today to discuss your Medicare plans and how they can be adjusted.