Medicare beneficiaries need to pay for a sometimes significant portion of their health care costs. Just like private health insurance, Medicare requires beneficiaries to pay premiums, deductibles and coinsurance. But there’s a lot you can do to keep these costs manageable. Here are some steps to minimize Medicare’s out-of-pocket costs.
Premiums. Most people aren’t charged a premium for Medicare Part A hospital insurance. The standard monthly premium for Medicare Part B medical insurance is $104.90 in 2015. This amount is typically deducted from your Social Security check if you are already receiving payments, but those who have not yet claimed Social Security will receive a bill. Retirees with modified adjusted gross incomes above $85,000 for individuals and $170,000 for couples are charged higher Part B premiums.
It’s important to sign up for Medicare Part B during the initial enrollment period, which is a seven-month window that begins three months before your 65th birthday. Your Part B premiums will increase by 10 percent for each 12-month period you were eligible for Medicare Part B but didn’t sign up for it. “If you are 68 when you sign up for Medicare Part B, you will be hit with a 30 percent premium increase every year for the rest of your life,” says Ronald Kahan, a medical doctor and author of “Medicare Demystified: A Physician Helps Save You Time, Money, and Frustration.” If you didn’t sign up for Medicare Part B at age 65 due to participating in group health insurance through your job, you should sign up within eight months of leaving the job or the coverage ending to avoid the penalty.
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Jeffrey R. Ungvary President