Welcome to Medicare School Daily, where we help you understand Medicare, save money,
avoid mistakes, and above all else, get the most out of your Medicare benefits.
Now, as I've been in the Medicare business for many years, one of the notions that I've
been surprised by is that people believing that Medicare has no cost to it.
They're approaching Medicare, and they begin
to find out why there is a cost to it.
And they're very surprised by that.
Now, how people draw that conclusion,
I have no idea because Medicare has never been free, but many think it's going to be free.
And so what I want to do today is I want to show you the costs that are involved in having
Medicare coverage.
Now, again, Medicare is a very, very good value, but it's not free.
There's always a cost to Medicare.
So the question is, how much does Medicare cost?
Well, you know that when you go on Medicare, there are only two options for your insurance.
You have two systems in Medicare.
One option is to take a supplemental plan and the other option is to take an advantage plan. Right?
And so whether we go with a supplemental plan or an advantage plan, we have to be enrolled
in Medicare Parts A and B..
You have to be.
Now, Medicare Part A has a zero premium. Whenever we're working we're paying into Medicare
A and as long as we've paid in for at least 40 quarters, which is basically 10 years worth
of work, Medicare does not charge us anything for Part A.
We've already been paying into that,
and so they give us the insurance coverage on Part A at no premium to us.
Now, part B always has a premium.
And this, of course, is based upon your income.
But ninety-five percent of the Medicare population is paying $144.60
a month for their Part B coverage.
If you're on Social Security, this comes right out of your Social Security check.
If you're not there, going to bill you for this quarterly.
So they multiply that times three and send you a quarterly statement.
Then once you start taking Social Security, they will begin to draft that out of your Social Security
check.
And so A is free for most people.
B has a premium of $144.60.
So regardless of if I'm taking a supplemental plan or advantage plan, I have to pay that
portion for my Medicare coverage.
Now, let's look at the cost of being on a supplemental plan.
Now, supplemental plans always carry a premium. When someone has a supplemental plan,
what they're doing is basically taking the risk of things that are not covered fully
by Medicare A and B, and they take the risk of those items,
we call those gaps in coverage, and you transfer the risk to an insurance company.
And any time we transfer a risk to an insurance company, we have to pay that insurance company
a premium for them to take the risk.
Right?
And so you have to pay a premium to them to do that.
Now, this is gonna be on a monthly basis.
Now, this is going to be seen throughout the country for sure.
So this is going to vary based upon state and gender and tobacco status and age.
So that's what we're giving you the range.
But right now, most people that are going on supplemental plans are buying a plan G.
And right now that range is about $100-$150 on a monthly basis.
All right?
So once we've purchased this supplemental plan and this G plan is going to pay everything
but the B deductible, then what we're responsible for, we pay the premium.
And then once a year, we have to pay our Part B deductible.
This year that's $198.
That's once a year.
And then once we've paid that, that supplemental plan is going to cover everything else.
As long as Medicare paid, that supplemental G pays everything but the $198.
So we are out of pocket our monthly premium.
And once a year, $198.
Now, if we decide to take an advantage plan, it is structured differently.
Now we have either very low or no monthly premiums.
Why is that?
Well, because instead of paying premiums, what we do is we pay co-pays instead.
Over here we didn't have a lot of co-pays.
We only had a B deductible and we were done.
Over here, I go to the hospital, pay a copay. Go to specialists, pay a copay. Have an MRI or CAT scan,
pay a copay.
Have cataract surgery, pay a copay.
So these are copay based plans, but forcing those copays will stop somewhere.
We call that the annual max out of pocket. Right now throughout the country
that's going to range in the area of $3,000 to $6,000.
So if the bill is $100,00 you're not going to pay that.
You're going to pay the max out of pocket for that specific year.
And then this number will reset every January.
And then again, you're responsible for your annual max out of pocket.
So this is a premium based coverage.
We pay a premium, transfer the risk and pay only the B deductible.
Over here, this is more of a copay.
So I pay as I go.
So I take on the risk of the copays.
And then, fortunately, they'll stop at some limit established on an annual basis.
All right.
So then when it comes to drug coverage, when we stay in the supplemental side, we will
have a separate drug plan.
Most zip codes have about 20 to choose from.
And because it's a separate drug plan, we have to pay a premium for that.
Again, this varies around the country.
They tell us the average drug plan across the country is $30 a month.
There's some as low as 13, there's some higher than that.
But the point is, you have a monthly premium.
You pay for that drug plan.
And then after you've met your premium, then, of course, you have to pay copays when you
pick up your prescriptions.
So that's how you pay for those.
Now, when it comes to advantage plans, what happens is: where over here,
I selected my best drug plan.
Over here, it's embedded.
It's just part of the package.
They'll cover me inpatient/outpatient and they cover my prescription drugs, and so it's
all in one coverage.
And so I just simply pay copays at the pharmacy when I go to pick up my prescriptions.
All right?
So these are the breakdown for the costs that you can expect when you decide it's time for
you to go on Medicare A and B.
So it's not free.
It's a wonderful value.
And hopefully this helps you understand your out-of-pocket costs so you can budget accordingly.
Thanks so much for watching.