The Top 6 Things Medicare Beneficiaries Pay For Out-Of-Pocket & How You Can Save More Next Year

Did you know that out-of-pocket costs top the list of considerations when picking a Medicare plan? In fact, based on a report by eHealth, around 29% of Medicare beneficiaries say finding a plan with affordable out-of-pocket costs is the most important thing to them, while 27% say affordable premiums are most important, and 26% cite coverage for their preferred doctors and hospitals. So, if you’re like most Medicare beneficiaries, and are living on a fixed income, you’re looking to save as much money as possible. Before the Medicare AEP is over (December 7), make sure to review the following top 6 out-of-pocket costs you can expect next year, so you can choose the plan that will save you the most money. 

1. Premiums

You will have a monthly Medicare premium to pay:

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  • Part B premiums for 2022 have not been released yet, but for 2021, they were $148.50/month, and you can expect next year to be slightly more. 
  • There generally is no monthly premium for Part A if you worked 40 quarters or 10 years. If you worked less than that, you can expect to pay a monthly premium ($471 per month for 2021).

2. Deductibles & Coinsurance

Deductibles are the amount  you will pay out-of-pocket before your coverage begins and Medicare starts paying for your medical services. For each benefit period, you will need to meet a Part A deductible (for 2021 it was $1,484); you will also need to meet a Medicare Part B deductible each year, which was $203 in 2021. 

You will also be responsible for Medicare coinsurance:

  • Part A: After 60 days in a hospital, Medicare charges a coinsurance per day for days 61-90. After 20 days in a skilled nursing facility, you will have to pay coinsurance each day for days 21-100. After 100 days, you pay all costs out-of-pocket.
  • Part B will only cover 80% of your medical expenses, after you meet your deductible. This leaves you to account for the other 20% out-of-pocket. 

3. Prescription Coverage

illustration of a white prescription bottle with a blue cross in the middle and blue circle around it
Prescriptions can cost a lot of money if you have chronic conditions, but you can save if you compare plans.

If you have a Part D plan, your monthly premiums will be based on which plan you purchased, and your prescription drug coverage costs will depend on which formulary your medication is in. Different prescription drug plans will place medications on different tiers, so your drugs might cost more or less depending on which plan you choose. 

4. Late-enrollment Penalties

You are supposed to enroll in Medicare when you turn 65, and if you miss the deadline to enroll,  you will face a late enrollment penalty. You can expect to pay:

  • Part A: You will pay 10% of your monthly premium for twice the number of years you were eligible but did not enroll in Medicare.
  • Part B: You will pay 10% of your monthly premium multiplied by the number of years you went without Medicare after you were initially eligible.

5. Non-covered Services

You need to budget for common medical needs that Medicare does not cover, such as routine eye care, dental care, and hearing aids. 

6. Medicare Supplement Plan

Many Medicare beneficiaries  purchase a Medicare Supplement Plan because it covers the Part B coinsurance (the 20% of medical expenses you owe out-of-pocket), amongst other services. These plans are relatively affordable, saving you money on your out-of-pockets expenses for a low monthly premium. There are 10 different plans to choose from, so you can pick the one that meets your specific medical needs and budget. 

The Medicare Annual Enrollment Period is a very important time when you can look for a plan that better suits your needs, and save some money. The AEP is coming to an end, so now is the time to think about your budget, review the out-of-pocket costs mentioned, and find ways you can cut down on costs, such as by purchasing a Medicare Supplement Plan. If you need help comparing plans, EZ can help – we will provide you with an agent who will compare plans in your area for free. No obligation. To get free instant quotes for plans that cover your current doctors, simply enter your zip code in the bar on the side, or to speak to a local licensed agent, call 888-753-7207.

About The Author:
Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.

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