Health care costs are expected to rise by at least 5% every year. Consumer costs for Original Medicare will rise with the changing cost of living and increases in necessary health care. Last year, standard premiums for Medicare Part B were $121.80. This year, Part B premiums are $134.
Explaining these costs and why some people pay more for Medicare than others can be tricky. The standard premium rate is determined based on rising rates from the previous year and is adjusted according to current and previous income.
These are the standard costs for Original Medicare plans in 2017, simplified:
If you’re paying a premium for Part A, it will be pricey, but premium-free plans are readily available for most people. You are eligible for a premium-free Part A if:
Otherwise, the standard Part A premium in 2017 is $413/month, unless you have paid Medicare taxes for more than 30 quarters, in which case the standard is $227.
With Part A, you will have a deductible/coinsurance for hospital stays of any length. There is a standard $1,316 deductible per period, with an additional $329 coinsurance for days 61-90 of the benefit period and $658 for every day after.
According to the Medicare website, with the standard rate of $134/month for Part B, those receiving social security benefits will pay closer to $109 (which is automatically deducted from social security payments). Those with high incomes (above $85,000) will pay anywhere up to the maximum of $428.60 per person.
Late enrollment fees may be higher than you think. The penalty fee does not go away; it remains for as long as you are enrolled in Part B. It could be along the lines of 10% for each year that you were eligible for Part B but did not sign up. Once you are late, you most likely have to wait for the general enrollment period, which could put you even later. As costs are rising, it is impeccably important to remind clients that they need to sign up within their eligible period.
Part B also requires a deductible of $183/year. After the deductible is met, you typically pay 20% of the costs for doctor visits, medical equipment, and outpatient therapy.