Whether you’re on an Original Medicare (Part A & B) plan, a Medicare Part C Advantage plan or a separate Medicare Part D prescription drug plan you are likely to incur out-of-pocket costs. The premiums, deductibles, copays and coinsurance that enrollees are expected to pay can quickly add up to thousands of dollars per year. The type of plan you select, your healthcare needs, and the state you live can also greatly influence how much money you will have to shell out.
Annual Healthcare Expenses and Out-of-Pocket Cost Caps
Unfortunately, Medicare is not free and if you’re only enrolled in Original Medicare there is no annual limit on what you will pay out-of-pocket. To some degree individuals can mitigate high annual healthcare expenses by seeking out coverage provided by private insurance companies like a Medicare Supplement (Medigap) policy or a Medicare Advantage Plan since they have annual out-of-pocket cost caps for their beneficiaries.
Make sure to check the Annual Notice of Change. For those that have coverage through Medigap or Advantage it is wise for enrollees to check their plans every year for cost increases or coverage changes by referencing the Annual Notice of Change (ANOC) report. Plan providers are required to send the report by September 30 of each year in order to provide the enrollee enough time to review the notice and decide if they want to make plan changes during the Fall Annual Election Period which begins October 15 and ends December 7. Any changes to coverage will go into effect for the following year.
What You Will Pay in 2022 for Premiums
- Part A – Hospital Insurance: $0 for the majority of participants. This would be individuals or their spouses that paid Medicare taxes while working (10 years). This is considered premium-free Medicare Part A. Those that are not qualified can pay up to $499 per month.
- Part B – Medical Insurance: $170.10 per month. Rates can be adjusted higher based on income. Individuals can reference the Income Related Monthly Adjustment Amount (IRMAA) to see if they fall into a higher premium bracket. This rate can also be adjusted higher with late enrollment penalties if you didn’t sign up when you were first eligible (typically at age 65). This premium can change annually. Beneficiaries will pay this premium every month regardless of whether the covered services were used.
- Part C – (Medicare Advantage): The amount you pay can change annually and you must continue to pay your monthly Medicare Part B premium to stay in the plan. The monthly premiums are based on what Medicare Advantage plan you joined. The average Advantage premium is $19 per month in 2022.
- Medicare Part D (Prescription Drug Coverage): The premium can vary by plan. The national average is currently at $31.47 per month.
- Medicare Supplement – (Medigap): Variable depending on coverage level.
What You Will Pay in 2022 for Deductibles
- Part A – (Hospital Insurance): $1,556 per hospital benefit admittance period
- Part B – (Medical Insurance): $233 per year
- Part C – (Medicare Advantage): Variable depending on plan/coverage level.
- Medicare Part D (Prescription Drug Coverage): Variable depending on plan/coverage level. Beneficiary annual out-of-pocket cost cap is $480
What You Will Pay in 2022 for Copays
- Part C – (Medicare Advantage): Variable depending on plan/coverage level.
- Medicare Part D (Prescription Drug Coverage): Variable depending on plan/prescription.
What You Will Pay in 2022 for Coinsurance
- Part A – (Hospital Insurance): No coinsurance once deductible has been paid for the first 60 days of hospitalization.
>$0 (Days 0-60)
>$389 per day (Days 61-90)
>$778 per day (Lifetime Reserve Days 91-150)
>Once Lifetime Reserve Days (after day 150) are exhausted you must pay 100% of cost - Part B – (Medical Insurance): After the deductible is paid beneficiaries will typically pay 20% of Medicare-approved costs relating to: durable medical equipment, doctor services (including most relating to hospital inpatient), outpatient therapy.
- Part C – (Medicare Advantage): Variable depending on plan/prescription. For more information visit Medicare Advantage (Part C) Costs
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