If you’re 65 or older, you’re typically eligible for Medicare. People with disabilities, end-stage renal disease and ALS may qualify for Medicare coverage at an earlier age.
When you sign up for Social Security from age 62 until 4 months before you turn 65, you’ll be automatically enrolled in Medicare when you’re 65. Otherwise, you can enroll anytime from 3 months before your 65th birthday to 3 months after on the official Medicare website.
When you sign up for Medicare, you have two options: Original Medicare or Medicare Part C. The Social Security Administration oversees Original Medicare, which includes Medicare Parts A and B.
Private insurance companies offer Medicare Part C plans. They cover everything included under Parts A and B and often provide additional benefits. You’ll sometimes see Part C plans referred to as Medicare Advantage plans.
Medicare Part D helps to cover the cost of prescription drugs for people with Original Medicare. Many Medicare Part C plans include prescription drug coverage. If you choose a plan that doesn’t, you can also sign up for Medicare Part D.
Some seniors choose to purchase Medicare Supplement Insurance or Medigap to help pay for out-of-pocket expenses Medicare doesn’t cover. This optional coverage is available through private insurance companies.
Understanding some basic insurance terminology can make it easier to compare the costs of various Medicare options. Here’s a rundown on some key terms:
A part of Original Medicare, Medicare Part A covers hospitalization costs. Let’s take a look at the costs associated with coverage.
People who paid enough, or whose spouses did, in Medicare taxes while working typically don’t pay a monthly premium. In 2023, the cost for those who don’t qualify for premium-free coverage was $278 or $506 per month.
The deductible for Medicare Part A is $1,600 per benefit period. Under Medicare rules, the benefit period begins when you’re admitted to a hospital or skilled nursing facility and ends 60 days after you stop receiving inpatient care.
If you stay in a hospital for more than 60 days, you’ll accrue a daily co-pay. The amount is $400 per day from days 61 to 90 and $800 for days 91 to 150. Starting on day 151, you must cover all the costs of hospitalization. Skilled nursing stays beyond 20 days also have co-pays.
Medicare Part B is the part of Original Medicare that pays for outpatient medical expenses, preventive care and durable medical equipment. The following are the costs associated with coverage.
How much you pay per month for Medicare depends on your annual income. As of 2023, the minimum monthly premium was $164.90 per month.
In 2023, the deductible for Medicare Part B was $226 per year.
You’ll pay 20% coinsurance for most things covered by Medicare Part B. For example, if a doctor’s visit resulted in a $100 bill, you’d pay $20.
Because private insurers offer Medicare Part C plans, premiums, deductibles and co-payments vary from plan to plan. In some cases, you may not pay any monthly premium for coverage. In 2022, the average premium for Medicare Part C for 2023 was estimated to be $18 per month.
Medicare Part D is optional prescription drug coverage. Here’s a breakdown of its costs.
As with Medicare Part C, premiums for Medicare Part D plans vary, and your annual income will impact how much you pay.
In 2023, deductibles on Medicare Part D plans are capped at $505 per year, so that’s the highest deductible you can expect to see on any plan.
How much you can expect to pay for co-pays and coinsurance with Medicare Part D also depends on the plan you choose. However, you generally won’t pay more than 25% of the costs for the first $7,400 you spend on prescription drugs during a year. After your total costs surpass $7,400, co-pays decrease significantly.
Medigap can help pay for some of the out-of-pocket costs of other Medicare plans. Since these plans are offered by private insurers, the costs for premiums, deductibles and co-pays vary. The Missouri Department of Insurance provides a rate shopper tool to help you find and compare plans.
If you have questions about Medicare or need help selecting a plan, counselors who work for the Missouri State Health Insurance Program can assist you. SHIP also offers a tool to help you compare and choose plans.
