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The Cost of Medicare

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PART A - Hospital Insurance

If you or your spouse paid Medicare taxes while employed, there is typically no additional monthly premium for Medicare Part A. If you accrue hospital expenses, you are responsible for paying up to your annual deductible, plus any additional costs depending on length of stay.

View Part A Cost Sharing

 

PART B - Medical Insurance

 

You are responsible for paying your coinsurance fees and your annual deductible for your medical expenses. Your Medicare Part B premium is deducted from your Social Security payments automatically. If you do not receive Social Security payments, you will get a Medicare bill every three months.

View Part B Cost Sharing

 

PART C - Medicare Advantage

 

Medicare Advantage Plan (Part C) coverage includes all Medicare Part A & B coverage, and Part D coverage if you select a plan that includes prescription drug coverage. Medicare Advantage Plans (Part C) often include additional coverage, like vision, hearing and out-of-pocket maximums not included in Original Medicare (Part A & B). You are responsible for paying any premium, copay and deductible that is part of your Medicare Advantage plan, as well as your Medicare Part B premium.

View Part C Cost Sharing

 

PART D - Drug Insurance

 

Premiums vary by plan. Please note that while Tufts Health Plan Medicare Preferred offers Part C plans that include drug coverage, Tufts Health Plan Medicare Preferred does not offer standalone individual Part D coverage.

View Part D Cost Sharing

 

Medicare Costs Overview

 

PART

A

Hospital Insurance

PART

B

Medical Insurance

PART

C

Medicare Advantage

PART

D

Drug Insurance

Monthly Premium Typically none if you or your spouse paid Medicare taxes while employed - otherwise $422

$109.00 - $134.00
Varies according to income

Varies by plan

$0 - $74.80
annual

Deductible

$1,340.00 
per benefit period

$183.00
annual

Varies by plan Varies by plan
Your Cost of Services Costs vary across benefit periods for both hospital stays and skilled nursing stays 20% coinsurance (after Medicare pays
80% of Medicare-approved amount for procedure)
Varies by plan Varies by plan
Penalties Yes, for late enrollment Yes, for late
enrollment
Not applicable Yes, for late
enrollment
How You Pay If you accrue hospital expenses, you are responsible for payment up to your annual deductible and costs associated with length of stay
 
More info:
Medicare Part A Cost Sharing
You are responsible for paying your coinsurance fees and the annual deductible
 
Your premium payment is deducted from your Social Security payments automatically
 
If you don't receive Social Security payments, you will get a Medicare bill every 3 months
 
More info:
Medicare Part B Cost Sharing
You are responsible for paying any premium, copay and deductible that is part of your Medicare Advantage plan, as well as your Medicare Part B premium
 
More info:
Medicare Part C Cost Sharing
Premiums vary by plan. Please note that Tufts Health Plan Medicare Preferred does not offer standalone Part D coverage.
 
More info:
Medicare Part D Cost Sharing


 

Medicare Part A Cost Sharing

Medicare Part A helps pay for medically necessary care for inpatient hospital stays, skilled nursing facility care as a follow-up to a hospital stay, some blood transfusions, hospice care and some skilled home health care.

Premium: None, if you or your spouse paid Medicare taxes while employed—this is typically referred to as “Premium-Free Part A,” which applies to most people. Otherwise, $422 per month.

Deductible: Yes; $1,340 per benefit period (in 2018; for hospital stays only. There is no deductible for skilled nursing facility stays.)

  • Must be paid before Medicare begins paying for your Medicare Part A related costs.
  • May need to be paid for each hospital stay depending on how close together they are. This is because Original Medicare measures your use of hospital and skilled nursing facility services through Benefit Periods.

Benefit Period: The timeframe for coverage beginning the day you enter a hospital or skilled nursing facility and ending when you’ve gone 60 days in a row without receiving any inpatient hospital care or care in a skilled nursing facility.

  • There is no limit to the number of Benefit Periods.
  • You must pay the Medicare Part A deductible for each new Benefit Period.

Lifetime Reserve Days: A provision of Original Medicare; you have a total of 60 reserve days for use during your lifetime that Medicare will pay for when you are in a hospital for more than 90 days.

Hospital Costs

Days

1 - 60

You Pay

$0

Coinsurance for each benefit period

Days

61 - 90

You Pay

$335

Coinsurance per day of each benefit period

Days

91+

You Pay

$670

Coinsurance per each "Lifetime reserve day" for each benefit period (up to 60 days over your lifetime)

Days

Beyond Lifetime reserve days

You Pay

You pay all costs

 

Note: Inpatient psychiatric care in a freestanding psychiatric hospital is limited to 190 days in a lifetime. You must pay a $1,340 deductible per benefit period.

 

Skilled Nursing Facilities

Days

1 - 20

You Pay

$0

Coinsurance for each benefit period

Days

21 - 100

You Pay

$167.50

Coinsurance per day of each benefit period

Days

101

and beyond

You Pay

You pay all costs

Note: There is no out-of-pocket maximum.

Penalty: If you aren't eligible for Premium-Free Part A and you don't buy Part A coverage during the Initial Enrollment Period (after any equivalent employer coverage runs out), your monthly premium may go up 10%. You will have to pay the higher premium for twice the number of years you did not have Part A despite being eligible. (For example: If you were eligible for Part A for one year but didn't sign up, you'll have to pay the higher premium for two years.)
Usually, you don't have to pay a penalty if you meet certain conditions that allow you to sign up for Part A during a special enrollment period.

 

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Medicare Part B Cost Sharing

Premium: yes $109.00 - $134.00 per month (2018),  depending on your income.

Note: Medicare Part B is optional and may be deferred if you are receiving equivalent coverage through either you or your spouse’s employer.

Your premium is deducted from your Social Security payments automatically. If you do not receive Social Security payments, you will get a Medicare bill every 3 months

Deductible: Yes; $183 annually (in 2018)
After paying the Medicare Part B deductible, your medical costs are:

Medicare Part B Pays:

80%

of the Medicare-approved amount for a specific medical procedure

You Pay

the remaining

20%

(called coinsurance)
Medicare Advantage plans can help cover the expenses that account for the remaining 20%

Most doctors accept the Medicare-approved amount as full payment but if your doctor doesn’t, you may have to pay more than 20%. There is no annual out-of-pocket maximum.

Penalty: If you don't sign up for Part B coverage when you're first eligible or if you drop Part B and then get it again later, you may have to pay a late enrollment penalty for as long as you have Medicare. Your monthly premium for Part B may go up 10% for each full 12-month period that you did not have Part B despite being eligible.

Usually, you don't pay a late enrollment penalty if you meet certain conditions that allow you to sign up for Part B during a Special Enrollment Period.

 

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Medicare Part C Cost Sharing

Premium: A monthly premium payment may be required, depending on the plan and insurance provider you choose.

  • In addition to a possible premium, you will continue to pay your Medicare Part B premium.

Deductible: Varies, depending on the plan and insurance provider you choose.

Penalty: N/A

Medicare Part C Covers:

Part A & B

Part D (Optional)

Your Medicare Advantage (Part C) provider will cover Medicare Parts A & B.  Part D will also be covered if your Medicare Advantage plan includes drug coverage.

You Pay

Variable

Depends on the Medicare Advantage plan you choose. Tufts has a number of different approaches. Many plans have optional drug coverage.  Find out more about Tufts
Medicare Advantage plans.

 

When you join a Medicare Advantage Plan (Part C) you must continue to pay your Medicare Part B premium.

 

 

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Medicare Part D Cost Sharing

Premium: Varies by plan. Regardless of how you elect to receive your Medicare Part D coverage, or which insurance provider you choose, there are coverage limitations and gaps that exist. The "Donut Hole" is one of these gaps, but its proper name is actually the "Coverage Gap Stage".

Deductible: Varies by Plan

The Four Stages

Medicare Part D is broken into 4 coverage stages:

 

1

The Deductible Stage

2

Initial Coverage Stage

3

Coverage Gap Stage
(Donut Hole)

4

Catastrophic Coverage Stage

When do you enter this stage? If your Medicare Prescription Drug Plan has a deductible, you begin your coverage in this stage. The deductible is the amount you are required to pay each year for your drugs before your Medicare Prescription Drug Plan will begin to pay its share of your covered drugs. When you elect a Medicare Part D plan or a Medicare Advantage Plan with prescription drug coverage Once your total prescription drug costs exceed $3,750 Once you reach the out-of-pocket maximum of $5,000 for rescription drug costs. (This includes any costs paid by you and/or the drug manufacturer for generic or brand-name drugs during the Donut Hole/Coverage Gap stage.)
What do you pay? Deductible amounts can vary between plans, however, no Medicare drug plan may have a deductible of more than $405 in 2018. Co-payment For generic (non-brand name) drugs: 51% of your plan’s cost
 
For brand name drugs:
40% of your plan’s cost
A small coinsurance amount or copayment for covered drugs for the rest of the year. These payments will vary by Medicare Part D providers.
What does your plan pay? $0 All other costs For generic (non-brand name) drugs:
The remaining 49%
 
For brand name drugs: 5% of the cost
All other costs
What does the drug manufacturer pay? $0 N/A For generic (non-brand name) drugs: 0%
 
For brand name drugs: 50% of the cost
N/A

Penalty: Medicare Part D is optional coverage. However, it often makes sense to join a Medicare Part D prescription drug plan when you first become eligible for Medicare because you may pay a penalty if you need to enroll in Part D a later time — and the penalty will increase every month you wait to enroll. Also, while you may be healthy now and require minimal medication, health needs can change unexpectedly.

The penalty is applied to your Medicare Part D premium after your initial enrollment period has ended and you’ve gone 63 consecutive days without either Medicare Part D coverage or some other form of creditable prescription drug coverage (often through an employer or union) that covers the same costs as standard Medicare Part D.

 

Learn more about the four stages of medicare prescription drug plans

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Medicare's Extra Help Program

Extra Help is a Medicare program to help people with limited income and resources pay Medicare prescription drug costs. If you qualify:

  • Medicare could pay up to 75% or more of your drug costs, including monthly prescription drug premiums, annual deductibles, and coinsurance
  • You will not be subject to the coverage gap or a late enrollment penalty

Many people are eligible for these savings and don’t even know it.

To see if you qualify for extra help, call:

1-800-MEDICARE 

(1-800-633-4227)

(TTY: 1-877-486-2048)

24 hours a day, 7 days a week

The Social Security Office

1-800-772-1213

(TTY: 1-800-325-0778)

Mon-Fri: 7am – 7pm

A MassHealth Health Benefits Advisor

1-800-841-2900

(TTY: 1-800-497-4648)

 

Tufts Health Plan Medicare Preferred

1-800-890-6600
(TTY: 711)
Mon-Fri: 8am-8pm

How does it all work?

With so many connecting parts, Medicare can be a little overwhelming to think about. To help you out we have pulled together some common scenarios to help you evaluate which coverage options are best for you. 

How does Medicare work?