How Will The ANOC Help Me Prepare For AEP?
During September, you will get the Annual Notice of Change (ANOC) from your Medicare Advantage and/or Part
September 30, 2021
Costs of Medicare
It’s hard to commit to something until you know what it will cost you. As it turns out, many people are surprised when they turn 65 and see that Medicare isn’t free. Many don’t expect the costs for Part B and Part D, or supplemental coverage.
Most beneficiaries have to pay Medicare premiums, but how much does Medicare cost, exactly?
At Cornerstone Senior Advisors, we can assemble a Medicare cost estimate for you so that you can plan ahead and not feel overwhelmed.
Medicare Part A Cost in 2020
If you’ve worked for at least 10 years in the U.S., you’ve already paid for Part A through payroll taxes. The cost for Part A for most people is normally zero.
If you must buy Part A, the cost will be around $458 per month. If you have a hospital stay in 2020, your Part A deductible will be $1,408. However, if you have a Medigap plan, it should cover this expense for you.
Medicare Part B Cost in 2020
Cost for Medicare Part B is based on your household income. The SS office will gather your IRS tax return from two years prior to determine what you’ll pay for Parts B and D. There are many items that contribute to your modified adjusted gross income (MAGI), including money earned through:
- Interest
- Wages
- Dividends from investments
- Capital gains
- Social Security benefits
- Tax-deferred pensions
If you and your spouse filed together, Social Security will base each of your premiums on that married income. Know that your premiums for Part B are not combined. They’re always individual.
Most beneficiaries pay the standard monthly Part B premium of $144.60. Some people who receive Social Security benefits will pay less than this amount. The Part B deductible for 2020 is $198.
Social Security will typically inform you of your next year’s premium in December or early January via mail.
Medicare Part D Cost in 2020
Just like Part B, Part D premiums for 2020 are based on income and vary by plan. Each state could have 20+ plans to choose from. In most states, you can discover plans that start around $10 – $15 per month. This is the base premium for Medicare Part D.
You’ll pay the plan’s written based premium unless you’re in a higher income category. Those with higher incomes pay more for Part D. It’s critical to consider this if you’re comparing the potential costs for Part D to other insurance, like employer insurance.
How Much Does Medicare Cost Per Month?
The amount will vary based on your income and the type of supplemental coverage you choose. For example, you have the base Part B premium, $144.60 per month, plus a Medigap Plan G monthly premium, $125 per month, plus a Part D premium of $27.50 per month — your total would equal $297.10 per month in premiums.
In this example, you can know with certainty your additional out-of-pocket spending would be little as Plan G would acquire most of your out-of-pocket costs.
There are several different Medicare plan options to choose from, which allows you to have a monthly premium within your budget.
To learn more about costs for Medicare Parts A, B, and D, contact Cornerstone Senior Advisors.
What About Medicare Supplements?
Many folks learn that Medicare and a supplement is less expensive than the private insurance they had before Medicare. But, it’s smart to get some estimates of your Medicare expenses before you retire so you can plan for the future and have enough savings.
So, How Much Will Medicare Cost You?
If you’re feeling confused, don’t worry. Medicare premiums increase nearly every year, and our agents can help you determine exactly what your Medicare expenses will be. We can help you figure out your potential costs right over the phone, so give us a call at (316) 260-3331.