Underwriting is the process assessing risk of issuing insurance. Undewriters evaluate applications,
For those who are new to Medicare, or even for those who have had Medicare for a while, you know that insurance lingo can be quite confusing. It’s important that you familiarize yourself with some key terms so you know exactly what your coverage includes and which costs you will have to pay out-of-pocket.
Specifically, it is important to differentiate between premiums, deductibles, and coinsurance.
The premium is the monthly amount you will pay for your Medicare coverage. The amount you will pay depends on how long you worked and paid Medicare taxes, as well as your income level.
Part A Premiums
The majority of Medicare beneficiaries over age 65 will not pay a monthly premium for Part A if they or their spouse paid Medicare taxes while working for 10 years or 40 quarters. If you do not qualify for premium-free Part A, you may have to pay a premium of up to $437 each month.
Part B Premiums
The standard Medicare Part B premium is set each year by the Centers for Medicare & Medicaid Services (CMS). The amount you pay will vary depending on your situation, including when you signed up for Part B.
It’s also important to note that if you wait to enroll in Part B, your premium could be 10% higher for every 12-month period that you were eligible for Part B but did not sign up.
The deductible is the amount you must pay out-of-pocket each year before your Medicare plan will begin offering coverage for your medical expenses. CMS updates both Part A and Part B deductibles each year.
Part A Deductible
Medicare Part A helps cover hospital, skilled nursing facility, and home health-care services once you meet your Part A deductible. For 2019, the Medicare Part A deductible is $1,364 for each benefit period.
Part B Deductible
Medicare Part B helps cover physician services, outpatient hospital services, certain home health services, and covered durable medical equipment once you meet your Part B deductible. For 2019, the Medicare Part B deductible is $185 for each benefit period.
Coinsurance is what you, the patient, pay as your share toward a claim. It is a form of cost-sharing between the insurance company and the consumer. You will typically begin paying your coinsurance after you meet your annual deductible. Usually, it is a percentage of the total cost.
Part A Coinsurance
For hospital visits, you will pay $0 in coinsurance for the first 60 days. For days 61-90, you will pay $341 per day in coinsurance. If you stay 91 days or beyond, you will pay $682 per day in coinsurance.
Part B Coinsurance
Once you meet your Part B deductible, you will pay a coinsurance of 20% of all Medicare-approved charges by providers for your health-care services. This will be your biggest threat to out-of-pocket expenses.
In the case of a major medical event, you could owe tens of thousands of dollars in medical expenses if you don’t have secondary insurance, like a Medicare supplement plan, to help cover those costs for you.
GoMedigap Can Help
If you are confused with Medicare or need some help navigating the various enrollment periods, we can help you. GoMedigap agents are professionally trained Medicare experts and can help educate you on Medicare and guide you in the right direction. To speak with a Medicare expert, call us directly at (800) 310-2550.