Medicare 2018 Costs at a Glance
HOW MUCH DOES MEDICARE COST?
2018 Medicare Part A Premium
Most beneficiaries over 65 don’t pay a monthly premium for Medicare Part A coverage if they or their spouse paid Medicare taxes for at least 10 years or 40 quarters while working.
In fact, according to CMS, approximately 99 percent of Medicare beneficiaries do not have to pay Medicare premiums on Part A because of their employment tax history.
Medicare Part B Premiums Are Based On Income
The Medicare Part B premium is set each year by the Center for Medicare and Medicaid Services (CMS).
The standard Part B premium amount in 2018 will be $134 (or higher depending on your income).
A factor that can affect your Medicare Part B premium is your income level.
Premiums can be higher for beneficiaries with annual household incomes that exceed specific thresholds.
Medicare Part B Late Enrollment Penalty
Another factor that can affect your Medicare Part B premium is the late-enrollment penalty.
If you don’t enroll in Medicare Part B during your Initial Enrollment Period (or if you drop Part B and then get it again later), you’ll pay a penalty each year you delayed your enrollment.
For 2018, the late-enrollment penalty is calculated by multiplying 10% by each full 12-month period that you could have had Part B, but didn’t sign up for it.
This penalty applies to your monthly premium for as long as you have Part B.
You may be able to avoid paying this late enrollment penalty if you delay Medicare Part B because you have other creditable health coverage, such as through an employer-sponsored group plan (either through your own or your spouse’s work).
In this case, you can enroll through a Special Enrollment Period (SEP) when you or your spouse stop working or that other health coverage ends, whichever comes first.
If you have to pay a monthly premium for Medicare Part A, you may decide to delay enrollment in Part A as well and sign up during your Special Enrollment Period.
If you enroll in Medicare with a Special Enrollment Period, you generally won’t have to pay a late enrollment penalty.
Medicare Part D Premiums
Medicare Part D, prescription drug coverage, is optional.
Similar to parts A and B of Medicare, it is available to beneficiaries during your initial enrollment period, when you are first turning 65 and you can enroll for up to three months after your 65th birthday month.
Medicare also allows for Special Election Periods (SEP), so if you don’t need Medicare’s Part D drug coverage when you’re turning 65 because you have other creditable coverage such as through an employer-sponsored group plan (either through your own or your spouse’s work), you may have a chance to take a drug plan at a later date, like when you’re retiring and replacing an employer’s coverage.
Medicare Part D prescription drug plans (PDP) often charge a monthly premium for coverage.
Since these plans are provided by private insurance companies, the actual premium you pay varies by plan.
Medicare Part D Late Enrollment Penalty
If you delay Medicare Part D prescription drug coverage or go without other creditable coverage for 63 days, you may be charged a late-enrollment penalty when you do enroll in a Medicare Part D prescription drug plan.
Medicare calculates your late-enrollment penalty by multiplying 1% per month of the national base beneficiary premium ($35.02 per month in 2018) for Part D plans by the number of full months you didn’t have Medicare Part D or other creditable coverage.
That penalty is added to your monthly Medicare Part D premium for as long as you are paying your own Part D premium.
The national base beneficiary premium may increase each year, so your late enrollment penalty may likewise increase each year.
This information comes from the Medicare.gov website
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