National Medicare Education Week: Medicare Coverage & Costs

Posted:September 17, 2018

It’s National Medicare Education Week (NMEW) until Sept 21st. The goal is to keep people informed when it comes to choosing a plan. To get you started here is are The Basics of Medicare.

There are four basic parts of Medicare: A, B, C and D. Each part helps pay for certain health care services. Each part also has certain costs that you may have to pay. Your Medicare costs will depend on what coverage you choose and on what health care services you use.

Medicare Part A – Part A is hospital coverage. It covers care you receive while an inpatient in a hospital or skilled nursing facility.

Medicare Part BPart B is medical coverage. It covers doctor visits, clinic services and care you receive as an outpatient.

Medicare Part C – Part C is Medicare Advantage. These plans combine the coverage of Parts A and B into one plan. They often include prescription drug coverage, too.

Medicare Part D – Part D is prescription drug coverage. Plans cover many medications that are prescribed by your doctor or other qualified health professionals.

Medicare helps pay for many health care items and services, but you will pay a share of the cost, too. Your Medicare costs include:

  • Premiums
  • Deductibles
  • Co-payments
  • Co-insurance

You pay premiums outright. Deductibles, co-payments (co-pays) and co-insurance are ways that Medicare shares the cost of your care with you.

Premium – A premium is a fixed amount that you pay. You may pay a premium to Medicare, to a private insurance company or to both, depending on your coverage. Most premiums are charged monthly and can change from year to year

Deductible – A deductible is a set amount that you pay out of pocket for covered services before your plan begins to pay.

Co-payment – A co-payment, or co-pay, is a fixed amount you pay at the time you receive a covered service. For example, you might pay $20 each time you go to the doctor or $12 when you fill a prescription.

Co-insurance – Co-insurance is when you and your plan split the cost of a covered service. For example, you might pay 20% of the allowed amount and your plan would pay 80%.

Out-of-Pocket Maximum – The out-of-pocket maximum is the total amount you might pay during a calendar year. The total does not include your premium or the cost of any services that are not covered by your plan. After you reach your out-of-pocket maximum, your plan pays 100% of the allowed amount for covered services for the rest of the year. Only certain types of private Medicare plans have an out-of-pocket maximum.

Cost-sharing Considerations – It’s easy to focus on just premiums when looking at Medicare costs. Premiums are regular monthly expenses that have to fit into a budget. And most of us are keenly aware of our monthly expenses.

But it’s a good idea to look at the big picture, too. For example, a plan with a low monthly premium might end up costing you more. You may have to pay a large deductible, or you might have high co-payments for doctor visits or prescriptions.

Think about how you will use your benefits and consider all the costs of Medicare. Also, you may be able to reduce your health care costs if you take steps to:

  • Understand Medicare cost sharing
  • Use health care services wisely
  • Adopt healthy lifestyle behaviors

Information from: