Most people don’t realize that Medicare only covers about half of a typical person’s total health care costs. On average, people with Medicare spend about $5,000 a year on health care costs Medicare does not pay for. And, people needing long-term care services and supports can pay a lot more for their care each year. What are your Medicare costs in 2017?
Your predictable Medicare costs–premiums and deductibles–depend upon your income, whether you enroll in traditional Medicare or a commercial Medicare health plan (click here to learn the difference), and the health care you need.
Whether you’re enrolled in traditional Medicare or a commercial Part C Medicare health plan, you must have Medicare Part A and Part B to get hospital and medical coverage. You will have coverage for most preventive care services as well as virtually all medically reasonable and necessary services (except vision, hearing and dental services). Here’s what you’ll pay for them:
- Most people who have worked at least 40 quarters or whose spouse has worked at least 40 quarters get Medicare Part A for free. If you need to purchase Part A, which covers inpatient care, you’ll pay up to $413 each month.
- Medicare Part B premium is $109 a month for about 70 percent of people, but some people with annual incomes under $85,000 pay $134.00. You will pay $134 a month if you’re not receiving Social Security benefits, enrolling in Part B for the first time in 2017 or have Medicaid as well as Medicare, in which case your state Medicaid agency will pay the premium. If your annual income is above $85,000, you also will pay more. To determine your premium, click here.
With traditional Medicare, the government-administered option, and supplemental insurance to fill gaps in coverage–retiree coverage from a former employer, private supplemental insurance or Medicaid–you can see almost any doctor and use almost any hospital with few if any out-of-pocket costs for Medicare-covered services. Without supplemental coverage—which can cost a small amount each month up to about $250 a month depending upon where you live and what coverage you choose–your out-of-pocket costs can be substantial if you need a lot of costly care. Without supplemental coverage, you must pay:
- $1,316 deductible for each inpatient hospital benefit period, up to 90 days (with 60 days outside the hospital or skilled nursing facility before a new benefit period begins).
- $0 coinsurance for the first 60 days of each hospital benefit period.
- $329 coinsurance a day for each benefit period beginning on day 61 through 90.
- $658 coinsurance for each of your 60 “lifetime reserve days” of coverage after day 90.
- All costs after your lifetime reserve days are used up.
- No deductible for skilled nursing facility care but $164.50 a day for days 21-100.
- No deductible or coinsurance for home health care or hospice care.
- $183 deductible each year before Medicare covers medical services from doctors and other health care providers, plus:
- coinsurance representing 20% of the Medicare-approved amount for most doctor services, outpatient therapy, and durable medical equipment, after you meet your deductible.
- If you want prescription drug coverage, you also pay a premium and coinsurance for a Medicare Part D prescription drug plan.
With a commercial Medicare Part C health plan, like Humana or United Healthcare, sometimes called “Medicare Advantage,” you still need Medicare Part A and Part B, and you may need to pay an additional Medicare Part C premium for your health plan and/or for drug coverage. Some Part C commercial plans require you to enroll in Part D for prescription drug coverage. You will have coverage for care from network doctors and hospitals provided you follow your health plan’s rules; you generally will need a referral to see a specialist. You cannot buy supplemental coverage to fill gaps. What you will pay out of pocket depends on the health plan you choose and the care you need.
- You may have to pay a deductible before your coverage kicks in, which varies based on the health plan you choose; and,
- You will have to pay a copay–a fixed amount–or coinsurance–a percentage of the cost–for each service you receive in the plan’s network, which also depends on the health plan you choose.
- Your out-of-pocket costs depend on which health plan you choose, how much care you need and whether you use in-network doctors and hospitals, up to $6,850 out of pocket in 2016. (Medicare.gov does not list the out-0f-pocket limit for 2017.)
- If you use doctors and hospitals that are out of network (as about one in three people with Medicare need to do if they have a complex condition), you will generally need to pay the full cost of your care except in emergencies and urgent care situations; there is no out-of-pocket limit for out-of-network care.
Keep in mind that no matter which option you choose, you generally need to pay out of pocket for health care costs that Medicare does not pay for. If you need to pay for long-term supports and services, such as custodial care in a nursing home or home care, you can easily spend between $20,000 and $80,000 a year out of pocket. Seven out of 10 people over 65 will need long-term care at some point in their lives. Medicaid will cover many of these costs if you qualify. In 2010, the 10 percent of the Medicare population with the highest costs, spent an average of nearly $20,000 a year for health care Medicare did not cover.
And, you generally will need to pay out of pocket for dental care, hearing care and vision care. You also will need to pay out of pocket for care when you travel outside the United States. Here are some ways to keep these costs down.
Here’s more from Just Care:
- What is the Medicare Part B premium in 2017
- 8.3 million people with Medicare also have Medicaid
- Medicare Part D drug plans: Three tips
- Free services to help you navigate Medicare and find supplemental coverage are available through your State Health Insurance Assistance Program
- Medicare supplemental coverage