For 2022, Medicare premiums will increase an average of 14.5%. That means the average Medicare user will pay $170.10 monthly, a $21.60 increase from the 2021 monthly premium of $148.50.
Medicare is the federal government health insurance program for:
- People 65 years of age and older.
- Some people with disabilities under age 65.
- People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant).
If you have Tricare coverage, you still are eligible for Medicare.
You have to enroll for Medicare parts A and B three months before you turn 65, even if you currently have Tricare or some other insurance coverage. If you don't enroll in Medicare when first eligible you may have to pay penalties or higher rates later on.
When you enroll in Medicare you are automatically enrolled in Tricare for Life, a no-cost Medicare wrap-around insurance package which pays for some things Medicare won't. Tricare for Life also lets you use Tricare's pharmacy program.
The Four Parts of Medicare
In understanding the basics of Medicare, it’s important to learn the different types of coverage offered by the program and what they include:
- Medicare Part A (Hospital Insurance) helps cover your inpatient care in hospitals. Part A also helps cover skilled nursing facility, hospice, and home health care if you meet certain conditions.
- Medicare Part B (Medical Insurance) helps cover medically-necessary services like doctor's services and outpatient care. Part B also helps cover some preventive services to help maintain your health and to keep certain illnesses from getting worse.
- Medicare Part C (Medicare Advantage Plans) is another way to get your Medicare benefits. It combines Part A, Part B, and, sometimes, Part D (prescription drug) coverage. Medicare Advantage Plans are managed by private insurance companies approved by Medicare. These plans must cover medically-necessary services. However, plans can charge different copayments, coinsurance, or deductibles for these services.
- Medicare Part D (Medicare Prescription Drug Coverage) helps cover prescription drugs. This coverage may help lower your prescription drug costs and help protect against higher costs in the future.
Medicare Part A (Hospital Insurance)
Medicare Part A helps pay for care in hospitals, skilled nursing facilities, hospice care, and some home health care in certain conditions.
Cost: Most people get Part A automatically when they turn age 65. They do not have to pay a monthly premium for Part A if they paid Medicare taxes while they were working.
If you (or your spouse) did not pay Medicare taxes while you worked and you are age 65 or older, you still may be able to buy Part A.
If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $499 each month. If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $274 monthly. There are four quarters in a year, so if you worked and paid Medicare taxes for less than eight years you may have the higher premium.
Coverage: If you are hospitalized, Medicare will pay all covered costs of hospitalization except the deductible, (which in 2022 = $1,556) during the first 60 days. For longer hospitalizations, you have to pay as follows:
- A total of $1,556 for a hospital stay of 1-60 days.
- $389 per day for days 61-90 in the hospital.
- $778 per day for days 91-150 in the hospital.
- For longer hospitalizations, you are responsible for all costs.
Medicare Part B (Medical Insurance)
Part B covers doctor services, outpatient hospital care, and some other medical services that Part A does not cover, such as physical and occupational therapists, and some home health care.
Cost: Most people pay a monthly Medicare Part B premium of $170.10 per month, depending on their income.
Enrolling in part B is your choice. You can sign up for Part B anytime during a 7-month period that begins 3 months before you turn 65.
Deductible: The Medicare Part B deductible is $233.00 per year. (Note: You pay 20% of the Medicare-approved amount for services after you meet the $233.00 deductible.)
Medicare Part C (Medicare Advantage)
Medicare Part C includes all benefits and services covered under Part A and Part B and usually includes Medicare prescription drug coverage (Part D) as part of the plan. It is run by Medicare approved private insurance companies.
Cost: A Medicare Advantage plan is like an HMO or PPO insurance program and is offered through a private insurer. You'll generally get your care from the insurance plan's network of providers. The average premium for Medicare Advantage plans will be $19/month in 2022.
Medicare Part D (Prescription Drug Coverage)
Medicare Part D helps cover the cost of prescription drugs and is run by Medicare approved private insurance companies.
Cost: Most drug plans charge a monthly fee that varies by plan. You pay this in addition to the Part B premium. If you're enrolled in a Medicare Part C plan that includes prescription drug coverage, the monthly premium may include an amount for prescription drug coverage.
If you have income above $91,000 if you file individually or $182,000 if you're married filing jointly you will pay an extra amount in addition to your plan premium..
The average Medicare Part D monthly premium will be $33.
If you are eligible for Tricare, its pharmacy benefit is almost always a better deal than Medicare's.
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