Are you nearing Medicare eligibility? If so, you should become familiar with the different Medicare plan charges you will likely experience throughout your Medicare journey. Many beneficiaries enroll in Medicare and are shocked to find out they are responsible for premiums, deductibles, and copays. There is also a common misconception that there are excess Plan G charges, but that is not true. Due to all this misinformation, here are five things to know about Medicare plan charges.
1. Medicare has monthly premiums
Although you likely have paid Medicare taxes your whole working life, you are still responsible for your monthly Medicare premiums. However, if you have worked ten years (40 quarters) in the U.S. and paid payroll taxes, you will receive Part A for $0.
Those who only have 30-39 quarters will pay a pro-rated monthly premium of $274 in 2022. If you have less than 30 quarters, your monthly premium will be $499/per month in 2022. But, if you are married and your spouse has the qualifications for a premium-free Part A, you would qualify for a $0 premium through your spouse.
You are responsible for the Part B premium, no matter your work history. In 2022, the standard monthly Part B premium is $170.10. However, if you are in a high-income bracket, you will pay an additional fee on top of your monthly premiums, referred to as an income-related monthly adjustment amount (IRMAA).
2. There are deductibles to be met
Whenever you are admitted to the hospital as an inpatient, you are responsible for the Part A deductible. In 2022, the Part A deductible is $1,556 per 60-day benefit period. After you pay the Part A deductible, Medicare would cover your inpatient stay at 100% up to 60 days.
Medicare Part B also has a deductible you will meet when receiving outpatient services. The 2022 annual Part B premium is $233.
After you meet your Part A and Part B deductibles, you will begin paying a copay or coinsurance for your healthcare services.
3. Medicare copays and coinsurance
Let’s say you exceed past 60 days as an inpatient in the hospital. In this case, you will begin paying a daily copay for your inpatient services. Here is what the copays would look like in 2022:
- Days 61-90: $389/per day
- Days 91-150: $778/ per day
- After 150 consecutive hospital stays, you will begin paying the full cost of your inpatient services.
Medicare Part B works differently, as you will pay a 20% coinsurance for your outpatient services after you pay the Part B deductible. Once the Part B deductible is met, Medicare will cover 80% of the Medicare-approved charges, and you are responsible for the remaining coinsurance amount.
However, if your doctor does not take Medicare assignment, you will also be responsible for Part B excess charges.
4. What are Part B excess charges?
Doctors who accept Medicare assignment will not bill you above the Medicare-approved amount. The doctor agrees to participate with Medicare and agrees only to charge the Medicare-approved amount for your outpatient service.
If a doctor does not accept Medicare assignment, they can charge up to 15% more than the Medicare-approved amount. This 15% charge is known as a Part B excess charge. You would have to pay out-of-pocket for this additional charge unless you have a plan, such as Medigap Plan G, that covers excess charges. If you don’t have a Medigap plan that covers excess charges, you may consider visiting a doctor that accepts Medicare assignment to avoid this additional charge.
5. How to lower your Medicare plan charges
As you can tell, there are some gaps in Medicare. Medigap plans help cover those gaps! There are ten Medigap plans on the market, and each of them covers a different set of benefits. The most popular Medigap plan in 2022 is Medigap Plan G. Medigap Plan G covers the Part A deductible, hospital copays, Part B coinsurance, Part B excess charges, and more.
The only out-of-pocket cost you would for Medicare-approved services for the year is the Part B deductible. After you meet the deductible, Plan G will pick up all your Medicare-approved healthcare costs.
Medicare is certainly not free, as you can tell! Becoming familiar with Medicare’s costs and coverage can save you financially in the future. You can visit Medicare.gov for more Medicare plan charges information.