Analyzing Your Medicare Share-of-Cost Expenses

Medicare Share-of-Cost Expenses

Your annual out-pocket expense for health care will depend on the type of Medicare plan that you select, in addition to the monthly premium associated with your selected Medicare plan. The annual cost will be higher if the plan charges a monthly premium in addition to your monthly part B premium. Usually, any of the Medicare Advantage plans and some other Medicare Health Plans will have one premium that is all inclusive and covers both Part A and Part B benefits. Extra benefits, if offered, may include prescription drug coverage that will also lower your out-of-pocket expenses if you require regular medications.

Another factor in determining your annual out-of-pocket expense is how much you pay for each visit or service, along with what type of medical treatment you will require and how frequently you will need it. It is nearly impossible to predict your medical needs for the following year, but you can use the past year’s health history to estimate these costs. If you feel that you will need frequent office visits, hospitalization or other health care needs, you might consider paying an additional monthly premium for a Medicare Plan that will provide you with more comprehensive benefits and a lower share of cost.

Prescription drugs are one of the most common out-of-pocket expenses for those currently insured under the Medicare program. Finding a Medicare Plan that provides extra benefits and maximum limits for prescription drugs could substantially lower your annual out-of-pocket expenses. The additional monthly premium, in most cases, will more than cover the expense you incur by having to cover 100% of the cost of your needed medications.

Some Medicare Advantage plans will not require you to also pay your Medicare Part B premium. It may save you money if you join a plan that offers this benefit. If you join a plan that covers your Part B premium, you will still receive all of the Medicare Part A and Part B covered services.

Since 2006, more Medicare Advantage Plans now have an option for prescription drug coverage. These plans will help even more with prescription drug costs than they have in the past. In the past, many of the plan’s had low annual maximum benefits and those maximums have improved. If your Medicare Advantage Plan provides a benefit to cover prescription drugs, you must accept the drug coverage your plan is offering. If the prescription drug coverage on this plan is not enough, you can join another plan or return to the Original Medicare Plans and supplement that with a Medicare Prescription drug plan. It is possible for plans to change each year and the amount they will reduce or increase your prescription drug coverage is also susceptible to change. Read your plan’s benefit descriptions and materials carefully before deciding which plan would be right for your needs.

If you have other health insurance through a group plan or other source, you will need to carefully analyze how this affects your Medicare benefits. Since your Medicare plan will usually pay second, the amount of additional benefits you need may be less. There would not be much sense in paying for optional benefits that are already covered through your other health insurance source.