If you’re nearing age 65, you’ll likely be eligible for Medicare soon—federal health insurance designed for older Americans. While Medicare covers a substantial amount of your healthcare needs, it doesn’t cover everything, and there are costs associated with your benefits. Many seniors decide to supplement coverage with Medicare Supplement insurance, or Medigap. Whether you’re on a fixed income, or simply looking for information, understanding the different costs associated with Medicare and Medicare Supplement will help you make an informed decision with coverage that fits your needs and your budget. Here are some costs to keep in mind.
Costs of Original Medicare (Part A and Part B)
Original Medicare is a federally funded health insurance program specifically designed to serve seniors age 65 or older, some people with disabilities, and others with End-Stage Renal Disease. Original Medicare includes Part A (hospital insurance) and Part B (medical insurance). Part A is free for most people—as long as you paid taxes throughout your working life. However, Part B carries a monthly premium that varies annually and by income.
2024 Medicare Part B Premium Amounts
Part B premiums vary based on income. Individuals who earn $85,000 or less or $170,000 or less as a married couple will pay $174.70 per month for the Part B premium in 2024. Premium amounts are calculated using the Income reported on your tax return.
Additional Costs of Medicare—Out-of-Pocket Expenses
In addition to Part B premiums, as a Medicare recipient, you are responsible for paying a variety of out-of-pocket expenses associated with your medical coverage. For instance, there are Part A and Part B deductibles that must be met before coverage begins, as well as coinsurance, copays, and in some cases, excess charges. While these costs vary, they can add up quickly, and many seniors buy a Medicare Supplement plan to shoulder the financial burden.
Costs of Medicare Supplement Insurance
Medicare Supplement insurance helps to pay for some of the costs associated with Original Medicare. Different plans offer different combinations of benefits. For instance, some pay your Part B bills and your Part A bills. Others offer only partial coverage. For many seniors, Medigap insurance makes it possible to get medical treatment when you need it without being burdened by out-of-pocket expenses. It’s important to note that the costs of individual plans vary significantly between companies. You may be able to find the same plan with the same benefits at a lower price if you compare. Comparison shopping is smart, and the best way to find the right coverage at a price that fits your budget.
References:
https://www.medicare.gov/supplement-other-insurance/medigap/costs/medigap-plan-costs.html
https://www.medicare.gov/sign-up-change-plans/decide-how-to-get-medicare/whats-medicare/what-is-medicare.html
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