Things to Know About Medicare Coverage

For beneficiaries who are eligible, much of the cost of hospital stays and doctor’s office visits is covered by Medicare. More recently, this government health insurance program has made an addition of preventive care to its list of covered services. Here’s how to maximize Medicare benefits by understanding the ins and outs of it.

What’s Covered

Hospital care falls under the purview of Medicare Part A. Medical insurance that offers coverage for doctor’s visits and outpatient services are Medicare Part B. Medicare Advantage Plans are an option to the Medicare provided by private insurance companies, usually with a variety of premiums and restrictions. Coverage for prescription drugs is offered via Medicare Part D prescription drug plans or is accompanied by a Medicare Advantage prescription drug plan.

Payment Amount

About 1.45% of the worker’s wages are paid by employees and employers, each in the Medicare system. Individuals who are self-employed shell out 2.9% of their income. Workers who earn more than $200,000 as individuals and couples who earn over $250,000 have to pay an added 0.9% of their income as Medicare tax.

Sign-Up Deadlines

An individual can first enroll for Medicare during the seven-month period that includes the three months before they turn 65, their birth month, and the three months after the month of their 65th birthday. Coverage can become effective from the month the person turns 65. Failing to enroll during this initial period may warrant a late enrollment penalty for the duration of one;s enrollment in Medicare. In case one postpones Medicare enrollment because they have group health insurance at work, it’s important that they enroll for Medicare within eight months of leaving the workplace or the coverage’s last date to bypass the penalty.

Premium Amounts

The premium for Medicare Part A is skipped by a majority of people. In 2020, the premium for the standard Medicare Part B was $144.60 per month, but that figure could be higher. Premium costs spike by a great margin for retirees with a modified adjusted gross income over $87,000 for individuals and $174,000 for couples, ranging from $202.40 to $491.60 per month.

Out-Of-Pocket Costs

As of 2020, there’s a $198 Medicare Part B deductible, after which one will have to pay 20% of the Medicare-approved amount for a majority of the services. There’s no yearly restriction on out-of-pocket costs. For every benefit period, there’s a $1,408 deductible for Medicare Part A in case of hospitalization, and additional costs are applicable if hospitalization exceeds 60 days.