|2017 Costs at a Glance|
|Part B Premium||Most people pay $134.00 each month.(This amount changes based on MAGI from previous years.)|
|Part B Deductible||$183 per year.|
|Part A premium||Most people don't pay a monthly premium for Part A. For those who purchase Part A, you will pay up to $413 each month.|
Below are some basic cost and coverage details regarding Medicare.
Medicare Part A (Hospital Insurance)
Hospital inpatient stay
- $1,316 deductible for each benefit period
- Days 1–60: $0 coinsurance for each benefit period
- Days 61–90: $329 coinsurance per day of each benefit period
- Days 91 and beyond: $658 coinsurance per each "lifetime reserve day" after day 90 for each benefit period (up to 60 days over your lifetime)
- Beyond lifetime reserve days: all costs
Skilled Nursing Facility (SNF) Care
- Days 1–20: $0 for each benefit period.
- Days 21–100: $164.50 coinsurance per day of each benefit period
- Days 101 and beyond: all costs
Medicare Part B (Medical Insurance)
Clinical laboratory services
- You pay $0 for Medicare-approved services.
Home health services
- $0 for home health care services.
- 20% of the Medicare-approved amount for durable medical equipment
Medical and other services
- You pay 20% of the Medicare-approved amount for most doctor services (including most doctor sevices while you're a hospital inpatient), outpatient therapy, and durable medical equipment.
Outpatient mental health services
- You pay nothing for your yearly depression screening if your doctor or health care provider accepts assignment.
- 20% of the Medicare-approved amount for visits to a doctor or other health care provider to diagnose or treat your condition. The Part B deductible applies.
- If you get your services in a hospital outpatient clinic or hospital outpatient department, you may have to pay an additional copayment or coinsurance amount to the hospital. This amount will vary depending on the service provided, but will be between 20-40% of the Medicare-approved amount.
These costs can be significant. For example, an elderly individual with multiple chronic conditions (e.g., congestive heart failure and Parkinson’s disease) can easily spend thousands of dollars per year on prescription medicines alone. These same individuals may be in and out of the hospital several times each year. If each visit represents a new benefit period, a new deductible is required for each. Deductibles and co-payments on Part B doctor visits can also quickly add up. Even more damaging, a serious illness or accident could put the individual in the hospital for a period in excess of covered days, requiring 100% payment of stratospheric hospital costs.
No sound retirement plan can ignore these potential costs.
Retirees facing this challenge need to think about strategies for funding these excess health care costs after age 65. Strategies for filling gaps between actual health care costs and Medicare coverage include:
- The purchase of so-called Medigap insurance from private vendors
- Using Medicare Part C
- If possible, maintain coverage through an employer-provided health insurance plan
- For low-income seniors, qualify for state assistance in paying some or all Medicare costs (Medicaid)
Medigap insurance is designed to supplement Medicare’s benefits by filling in some of what Medicare does not cover. A Medigap policy pays for Medicare-approved charges that are not paid by Medicare because of deductibles or coinsurance amounts for which the beneficiary is responsible. The cost of Medigap policies varies widely from plan to plan. Care must be taken in choosing the appropriate plan for a retiree’s individual situation.
To discuss the impact of health care costs on your retirement income plan and the optimal solution for your personal situation, contact a Mainstay Capital Management Retirement Planning Specialist toll-free at 1-866-444-6246.