You just retired and now you like most people are looking to cut cost, or at the very least identify what expenses you will need verse don’t need in your life. One of the first questions you might have will be related to Medicare coverage and Cost.
You may also be wondering what do I need to obtain as related to Medicare insurance because prior to now your employer took care of all of my insurance needs and decisions on your behalf.
Some Medicare beneficiaries have also just found out that Medicare is not free. Following is a list of items we will review and discuss in detail.
These are very common questions about the costs for Medicare and other related insurance expenses we are asked about. The costs for Medicare Part B and Part D, as well as supplemental coverages, are things that many Medicare beneficiaries and their families may not have planned for. It can surprise you when you turn 65 and learn that Medicare is not free.
So, do you have to pay for Medicare? Yes, most people do pay Medicare premiums. Fortunately, it’s fairly easy to put together a Medicare cost estimate so that you can create a plan even if it is at the last minute before signing up.
Below please find the breakdown of Medicare Part A and Part B cost:
Medicare Part A (Monthly Premium) – For most people this coverage comes at no additional cost. If you did not work the required 40 quarters or ten years is can cost as much as $471 per month.
Part A Deductible & Co-insurance Consideration:
**Lifetime Reserve Days: After 90 consecutive days in the hospital, Medicare gives you 60 additional days of inpatient hospital care to use during your lifetime
If you had Original Medicare only and you stayed at the hospital for a total of 150 days, and you had not previously used your lifetime reserve days your total bill would be: $1,484 + $10,759 + $44,520 = $56,763.
If you purchased a Medigap plan your cost would be $0.00 for the same hospital stay. If you obtained a Medicare Advantage plan your cost could be as low as $0.00 or several thousand dollars depending on the daily copay and/or coinsurance amount under your specific plan.
It is also worth mentioning, Medigap plans provides an additional 365 days of hospital coverage beyond the 90 or 150 day mark at no cost to you.
Medicare Part B (Monthly Premium) – The Standard monthly premium is $148.50. Higher wage earners could pay more.
Part B Deductible & Co-insurance
**Medicare Part A only covers some of the costs of inpatient hospital stays for up to 90 days per benefit period. However, you may be able to use Medicare lifetime reserve days to extend your Part A coverage if you need inpatient hospital care past the 90-day limit. You have a total of 60 lifetime reserve days that you can use for this purpose.
If you obtained a Medigap plan, these plans can cover up to 100% of all Part B cost to include your plan year deductible, 20% coinsurance, and the 15% excess change for those Doctors who do not accept Medicare assignment.
Medicare Advantage plans have a very wide variety of changes they can assess depending on the Part B services you are obtaining. You will need to refer to the Medicare Advantage plan summary of benefits section for all fees charged by services rendered.
Medicare Part C or how it is more commonly known as Medicare Advantage Plan have a wide range of cost. Depending on your local area and available insurance carriers and plans will depend if you have front end cost (Monthly Premiums) or just backend cost (Co-pays, Deductibles, Co-Insurance). In some areas you may have both front and back end cost.
Here is a breakdown of what cost-sharing looks like in Medicare Advantage plans:
Medicare costs for Part D varies based on your annual adjusted income. For most Medicare Beneficiaries the Government will not assess an additional fee above and beyond what the private insurance company charges for their plan.
Your Medicare Part D Premiums for 2021 also vary by plan and overall level of prescription benefits. Each State will typically have between 15 to 40 plan option for you to choose from when you enroll into an individual Part D plan.
The National average cost for Part D premiums is $33 per month. That being said there are companies that will offer plans as low as $7 a month. When considering a Part D plan it is important to not only consider the monthly premium but the overall cost to purchase your prescription drugs.
Many times if you have several prescription drugs that you will need each month, obtaining a plan that cost more each month could end up costing you less throughout the year.
To determine your Medicare cost for Part D prescription drug plans in 2021, review the below Medicare IRMAA 2021 table. Most Medicare Beneficiaries will fall into the first category and will not have to pay any additional charge outside of your Part D plan premium.
You will notice that the additional premium charge is based on your 2019 tax year verses the taxes you filed for 2020 or 2021 tax year. If your income falls below these amounts identified, you can file a petition if the Government doesn’t automatically reduce these additional fees.
Your Medicare Insurance Agent is not allowed to quote the Part D premium with any of these assumptions, so the quote you receive will only include the base carrier monthly charge excluding any additional fees assessed by the Government. If you have questions to these fees they can point you to the 2021 IRMAA fee table so you know what to expect based on your pior income.
As you can see, depending on your total income for 2019, these additional fees can substantially increase your overall cost for Part D coverage depending on which income level you fall under.
We made it easy for you, click below and complete the appropriate appeal form if you need to notify Social Security that the amount they are charging is not correct.
While Medigap policies are standardized by the Government (meaning they provide the exact same benefits no matter which Medicare Insurance Carrier sells it) Medicare Supplement Plans are sold through private insurance carriers. The intent of these plan is to fill in the gaps left behind by Original Medicare.
Unlike Medicare Advantage plans MediGap Plans do NOT replace the rights given to you by Original Medicare but rather enhances it.
Based on the below chart you will see the top row represents different Plans that are identified by a specific plan letter (Plan G or Plan B ). Below each plan letter identifies the Medicare benefits that are included in each of the Medicare plans. For instance, the first line show “Part A co-insurance and hospital costs”, for this Medicare benefit all letter plans cover this benefit at 100% as identified by the check marks for all letter plans (Plan A-N). However, if you look at Plan A you will notice no check mark next to “Coinsurance for skilled nursing facility”. This means you are 100% responsible for any copays or cost for this specific coverage as outlined in Original Medicare.
If you look at Plan G which is one of the most popular plans purchased by Medicare Beneficiaries, you notice that everything is covered at 100% except your Annual Part B deductible which for 2022 is $233 and Foreign travel emergencies which is covered at 80%.
Medicare Supplement plans do have a monthly premium. The premium is based on the Medigap plan you select, your current age, State, zip code and potentially your overall health. If you enroll during your guaranteed issue period then your health will not play a factor into your cost and acceptance into a plan.
Plan G will typically cost around $150 to $300 a month but again this amount can be higher or lower depending on the above factors. It will be important that you obtain a quote based on your actual information.
Medicare beneficiaries prefer purchasing a Medicare Supplement plans because their cost are set and they can budget for this cost each month. In addition it also allows them the flexibility of going to any Doctor, hospital, or cancer facility that accepts Medicare without getting a surprise bill or told the facility you picked is not covered under your network. Medigap plans are not part of a specific network of Doctors, so you are not limited to who you can or can not see. The only requirement is that your Doctor and medical facility accepts Medicare.
Dental Insurance may or may not be included in your Medicare Plan.
Original Medicare does not cover traditional dental insurance. You would need to obtain an outside policy that meets your insurance needs for your teeth.
The cost of a PPO Dental Insurance plan can range from $30 to $100 depending on the level of coverage you need for yourself. For instant insurance carriers will limit their coverage amount from $500 annually to $2,000 annually. As this coverage amount increase the monthly premium will increase.
Some Medicare Advantage plans and MediGap plans will give you a couple Dental Plan options. They can include basic dental coverage (basic cleanings and sometime an X-Ray) at little to no cost. Then they may offer broadened coverage for an additional premium if you want a more comprehensive plan that provides coverage for Fills, Crowns, and so on. Dental Plans offered by the Medicare Advantage plans are usually HMO style plans which means you will need to use their network of dentist.
It is important to note that 80 plus percent of dentist only accept PPO plans. This means you would need to obtain an outside plan from your Medicare Advantage plan if you want go to these dentist.
Similar to dental insurance, vision insurance may or may not be included within your Medicare Plan.
The cost for vision insurance can cost between $15 to $25 per month depending on the level of coverage. In addition you might be able to bundle your dental coverage with a vision plan.
Level of coverage means
Some Medicare Advantage plan & Supplemental plans may include some coverage for vision. It is important to review the plan documents to see if the coverage being offered is adequate to meet your needs.
The need for long term care becomes an ever increasing reality as you get older. The cost for long term care can send many families into sticker shock as they conduct their research. According to Genworth calculator they break down the average MONTHLY COST in 2019 for long term care in the Long Beach, CA areas as the following.
Homemaker Services: $5,243
Home Health Aide: $5,243
Adult Day Health Care: $1,636
Assisted Living Facility: $4,500
Semi-Private Room: $7,908
Private Room: $9,125
If you are looking into Long Term Care insurance when you actually need it, that is when it is too late. Unfortunately, there are no insurance carrier that will provide this benefit at the same moment that you end up in a long term care facility or are about to be put into one. The sooner you research your options the lower your insurance premiums will be.
The average Long Term Care insurance cost around $2,800 per year. These premiums are not locked in for the life of the policy which means you will experience increases to your insurance premiums similar to your home and auto insurance.
The cost for long term care insurance is dependent on the insured value and time period of coverage and of course the age and health of the individual. If you are looking for a Private Room for your loved one then the annual cost will increase to cover the higher monthly cost for that room. If you are willing to share a room with someone else, then you could see a lower premium.
No one likes to talk about the one reality we will all face which is the end of our life. The question that needs to be answered is how easy do you want it to be for your family to take care of your final expenses and do you have any major debt.
A final expense insurance policy can help either completely pay for your entire burial expense or at the very least reduce the cost burden.
Funeral costs vary widely depending on where you live and what components you want to be included in the funeral ceremony. Based on our research and industry studies, average funeral costs are:
You do have choices when it comes to these cost. If you have enough savings this can help pay for this cost. But an alturnative can be a small life insurance policy referred to as a final expense policy. These do range in price from $150 to $350 per month or more depending on the insured value of the policy ($5,000 to $50,000).
We want you to know that we are here for you. We can help you navigate through all of your Medicare insurance cost and help you to enjoy your retirement. As you have just reviewed there are a lot of cost associated with retirement. We are here to help you keep those cost contained so you can better manage your money.
Please give us a call so we can set up a consultation and we will complete a full analysis of what your true needs are now and into the future.