Tag: Prescription Drug Plans

How Much Does Medicare Cost?

How Much Does Medicare Cost?

How Much Does Medicare Cost?

Medicare costs can be different person to person, depending on which type of plan you choose. After you have a basic understanding of Medicare and it’s basic components, you will want to know how much does Medicare cost? The answer is, it depends on how you structure it. Let’s break down what you could be paying.

Medicare Costs Broken Down & Made Simple

When you set up your Medicare, you will decide if:

Your costs will also be different if you get help in any way from any state or federal programs.

How Much Original Medicare Costs

  • Medicare Part A – For most people, there is not a cost or premium you pay for Part A. Your Part A is premium free if you worked in the US and paid Medicare taxes for at least 30 quarters. (You will pay between $240 – $437 a month depending on your work history for Part A if you do not meet the premium free requirements).
    • There is also a $1,364 yearly deductible for Part A services and coinsurance tiers on hospital stays.
  • Medicare Part B – You will pay a premium for Part B. In 2019, the standard premium is $135.50 per month. If you make more than $85,000 a year in retirement, you will pay more on an income dependent scale.
    • There is also a $185 Part B deductible and a 20% coinsurance (co-pay) for most approved services.
    • Late penalties may also apply to Part B (and less commonly, Part A) if you do not sign-up when you are first eligible.

How Much Prescription Drug Costs

Medicare Part D Prescription Drug Plans

Medicare Part D – Prescription Drug Coverage needs to be obtained from a private insurance company. Each company will price their service differently and you can shop for the best plan and price for you. In addition, you will pay more for your Part D coverage, on a sliding scale, if you make more than $85,000 a year while on Medicare.

Other costs to consider with your Part D coverage are co-pays and coinsurance, in addition to deductibles.

There are also late enrollment penalties associated with not signing up for Part D coverage when you are first eligible if you do not have “credible coverage.”

How Much Medicare Supplements or Medicare Advantage Plans Cost

On top of your Original Medicare, you will need to make a decision to either participate in a Medicare Advantage (Part C) plan or to consider having a Medigap (Medicare Supplement) Plan. If you need help deciding on which one is best for your needs, please read our article on Medicare Advantage Vs. Medicare Supplements.

  • Medicare Supplement Plan Costs – Medicare Supplements will each have a different cost depending on the Letter Plan you choose and the company you go with. The government decides what benefits are offered by each letter plan. Then, each private insurance company decides what price they can offer for each plan in each market. It is a good idea to compare multiple plans by multiple carriers (insurance companies) in your area before choosing a plan. An independent insurance agent will be able to help you do this.
  • Medicare Advantage (MA/MAPD) Costs – Part C, or Medicare Advantage Plans are also offered by private insurance companies and stand in place of Original Medicare. In addition, they often include Part D Prescription Drug Coverage. Some of these plans have low or zero premium plan options. A few even cover Part B premiums. All of them are required to have max out of pocket expenditures and deductibles. It is a good idea to talk to an independent insurance agent on MAPD plans in your area to help you choose your best option.

Medicare Costs Summary

In summary, Medicare will cost you something, unless you are on full benefits from Medicaid. Moreover, you have already been paying into the Medicare system during your working career with Medicare taxes. Common set-up for Medicare beneficiaries include:

  • Having Original Medicare, Part A Premium Free, Part B Premium at $135.50 /month and a stand alone Part D Premium to pay. Then, adding on a Supplement Plan to cover the expenses Original Medicare does not pay.
  • Or having a Part C Medicare Advantage Plan that includes a drug plan with a premium to pay (sometimes a $0 premium). Most commonly, you will still pay your Part B premium with Medicare Advantage.

Get More Help Understanding How Much Medicare will Cost You

One good resource for learning more about the costs of Medicare is the Medicare and You Book published by the government every year. It is a large book, so please star with our Medicare and You User’s Guide to learn what it offers and to get a copy if you need one.

In addition, finding the best Medicare options for your budget can be a lot to take on, but hopefully this breakdown is helpful. I strongly suggest talking to a professional to help you in setting up your Medicare plan. As an independent agent myself, I suggest using an independent agent. They are not tied to one company, so they work for you, not one carrier and can help you in considering many different carriers and plans.

Carly Cummings, Medicare and Medigap Expert

As always, if you live in Nebraska or Iowa, please give me a call, and I can help you out either in person or over the phone.

Carly Cummings, NE/IA Licensed Independent Insurance Agent for Life and Health.
how much does medicare cost?
Please follow us:
error
What is AEP?

What is AEP?

What is AEP? Medicare’s Annual Enrollment Period

Do you love a good acronym? How about a very large amount of them? The health and insurance industries are nothing if not full of confusing acronyms. Moreover, “industry people” will just assume you know them all. AEP is no exception, so let’s discuss what actually is the Medicare Annual Enrollment Period.

The Definition of AEP

Medicare Annual Enrollment Period (AEP)

AEP stands for Annual Enrollment Period. It is defines the period of time each year eligible seniors can enroll in both Medicare Advantage Insurance Plans (Part C) and Prescription Drug Plans (Part D). In addition, you will not be required to go through medical underwriting to join these plans. (ESRD is an exception.)

Outside of a SEP (Special Enrollment Period) or your IEP (Initial Enrollment Period), this is the only time that you can join a Part D or Part C plan. Yes, I know, more acronyms!

In addition, AEP is one of the two times you can switch plans, if you are already in one. (The US government just added the Medicare Advantage Open Enrollment Period. This is a second period of time – Jan. 1 – March 31 – where you can switch plans once if you are already in a plan. )

When is AEP?

The Medicare Annual Enrollment Period is October 15th – December 7th. The changes you make during this period of time will take place for the following year on January 1st.

Possible Changes During the Medicare Annual Enrollment Period (AEP)

Does AEP apply to Medigap (Medicare Supplement) Plans?

No, AEP does not apply to Medigap (supplements). You can switch a supplement plan at any time. However, you will be subject to medical underwriting. This means that you are not guaranteed to be accepted into the Medigap plan.

How do I Switch Plans / Join a Plan During AEP?

You can start researching and learning about the plans available to you the next year, starting October 1st. However, you will not be able to complete an enrollment application until October 15th.

When switching/joining a MA/MAPD or Drug Plan, I highly suggest using an independent insurance agent. There are many considerations when choosing a plan, and she/he will help you in making sure you pick the right plan for you. (If you live in Nebraska, please give me a email/call/text, and I will be happy to help.)

That said, you can also research plans and see their ratings at https://www.medicare.gov/find-a-plan.

Please follow us:
error
Part D Prescription Drug Plans

Part D Prescription Drug Plans

Medicare Part D Prescription Drug Plan Information

Part D of Medicare covers Prescription Drugs. There are different Part D Prescription Drug Plans available. When you choose a plan you will find various costs and coverage. However, the government establishes a “standard level of coverage” that each plan must meet.

Part D Prescription Drug Coverage

Each plan has a formulary – a list of prescription drugs – they cover. In addition, they have a tier system that ranks how much you will pay for each drug. For example, a generic drug for a specific condition might be in a lower price tier than a brand name of the same drug. You can learn more about Part D drug coverage at Medicare.gov.

Where Do I Get Part D Coverage?

You can have Part D Prescription Drug Plans by themselves (with Original Medicare Part A and Part B, but with or without a supplement) or as a part of your Medicare Advantage Plan.

What do Part D Prescription Drug Plans Cost?

Each plan will have a monthly premium (this is included in your plan premium if you have a MAPD plan). In addition, plans will also have yearly deductibles, co-payments, and costs in what is called the coverage gap. Plans will often try to help you try to save money on your drugs by offering generic options, pharmacy networks, and sometimes mail order programs.

What is the Coverage Gap (aka Donut Hole) in Part D?

In most drug plan there is a limit on what the plan will cover. In 2019, this limit was $3,820. However, once you hit $5,100 in out-of-pocket expenses in a year, you enter Catastrophic Coverage and your costs go back down to paying only small co-payments for covered drugs.

Fortunately, this “hole” in the middle of coverage has been closing-up since 2010, and by 2020, it is basically the same as initial coverage until you enter the catastrophic zone. In 2019, you pay 25% of the plan cost for covered brand name drugs and 37% of the plan cost for generics. To learn more about how these costs apply to your total for entering catastrophic, visit this page.

Are Medicare Part D Prescription Drug Plans Necessary?

Part D coverage is technically optional coverage. However, if you do not enroll in a plan right when you are eligible (and you don’t have any other coverage in place the government would consider creditable drug coverage), you will face fines later when signing up. Basically, if you think you will ever need drug coverage, you probably should take on a plan immediately. Penalties are calculated based on how long you are without coverage and last as long as you have Part D coverage.

How and When can I get or switch a Part D Prescription Drug Plan?

If you have both Medicare Part A and Part B, you are eligible to enroll in a Part D Prescription Drug Plan. We are always advocates of you speaking with a licensed professional before you purchase a plan or switch plans. You can review plan options online, but going over your medications and concerns with a licensed agent may save you from trouble down the road.

Your IEP, Initial Enrollment Period, for Part D is the same 7 month period when you can enroll for Medicare. This starts 3 months before you turn 65, your birthday month, and the 3 months after. Your coverage begins the first day of the month you turn 65. However, you must sign-up in time for that to happen.

Much like an MA/MAPD Plan, switching Part D plans can occur during a Special Enrollment Period. (For example, if you are moving out of a plan’s territory.) Secondly, you can sign-up each year during the Annual Enrollment Period (AEP). AEP happens yearly from October 15th to December 7th.

Other Related Topics

Medicare Part D Prescription Drug Plans
Please follow us:
error
What is Medicare?

What is Medicare?

Medicare 101 – The Basics

To start, we are going to assume that you know very little about Medicare. We will break down the basics to Medicare Insurance and its various parts. In addition, we are going to assume you have better things (or at least more interesting things) to do than read about Medicare all day, so we will keep it succinct.

What is Medicare?

In 1966, the United States started the Medicare program to provide seniors, age 65 and older (and some people with disabilities), a national health insurance program. The Centers for Medicare and Medicaid Services runs these programs. It also covers people with end stage renal disease and amyotrophic lateral sclerosis. (Visit the government’s website, if you want more info on these situations).

When do I sign-up?

If you are mentioned in the above paragraph, you might be ready to sign-up. We are going to assume that you are in the senior category for simplicity’s sake. Turning 65 is the catalyst for many people to join the Medicare program, but if you are still working and covered by an employer’s program, you may opt to defer this start date. (Just remember to tell the government if you are opting to defer.)

Open enrollment starts 3 months before your 65th birthday and ends 7 months after that start (so 3 months after your 65th birthday month). If you do not have “credible coverage,” such as an employer plan, in place after this window, you could incur penalties from the government.

What am I getting with Original Medicare?

Medicare Parts A B C D Explained
Click here for our infographic on the 4 parts of Medicare.

Original Medicare, the national health care program sponsored by the US government, is going to provide you with two points of coverage: Part A Hospital Insurance and Part B Medical Insurance. In addition to these two basic parts, you have to option of adding on a Part D Prescription Drug Plan. These drug plans are not administered by the Federal government, but instead by private insurance companies, and you must sign-up for them individually.

The last part of Medicare is Part C or Medicare Advantage. This is a second route you can take to manage your health care that replaces Original Medicare with a “bundled” program that rolls your Parts A, B and D all into one plan. These plans (also called MA or MAPD plans) are provided by private insurance companies. We will discuss how this works more after we look at the basic Medicare parts.

Let’s look at each part:

Part A

First, Part A, also known as “Hospital Insurance,” helps with coverage regarding inpatient care, skill nursing facility care, hospice care, and home health care. (Visit the government’s website for more details ).

Part B

Second, there is Part B, also known as “Medical Insurance.” Part B helps with coverage related to doctor and other provider services, outpatient care, home health care, durable medical equipment, and any covered preventative services.

In addition, there is a third part called…

Part D

Finally, you need Part D, also known as “Prescription Drug Coverage.” Private insurance companies provide Part D coverage rather than the government.

Consequently, if you decide not to take on Part D coverage right away, you might incur a penalty if you try to join later. This is if you do not have “credible coverage” (such as with an employer or union). Therefore, please make sure you are signed-up for a drug plan, not just Parts A and B. This is important if you ever suspect you will need this benefit in the future.

The Two Paths of Medicare Coverage

You can be covered one of two ways.

  • Path One – Enroll and keep Original Medicare Part A and Part B, sign-up for a Part D or drug plan with a private insurance company, and then you can add on top of that a Supplemental Coverage Plan that picks-up the tab where Medicare leaves off. There are different kinds of Supplement plans (Medigap Policies) that cover different benefits and they all cost different prices with different insurance companies. To learn more about Medigap or Supplements click here.
  • Path Two – After your enrollment in Parts A and B, your second option is to join a Part C plan. We call these Medicare Advantage Plans, and private insurance companies run them. In fact, the government calls these “bundled plans.” Most of them wrap parts A, B and D all into one package. In addition, they often give their members extra benefits and hopefully lower out-of-pocket costs. To learn more about Medicare Advantage click here.

What are My Next Steps?

What is Medicare, Medicare 101, Learn the Basics
Please follow us:
error
Social media & sharing icons powered by UltimatelySocial