Medicare benefits were designed to provide seniors and other qualifying individuals access to affordable health insurance. Tens of millions of seniors across America rely on Medicare coverage to help cover the cost of things like doctor visits and prescription medications. Although Medicare benefits cover many medical expenses, the use of Medicare benefits does include some out-of-pocket costs.
Premiums and deductibles under Original Medicare
Original Medicare includes separate parts that work together to provide comprehensive healthcare coverage. Medicare Part A, the inpatient benefit, supplies coverage for hospital care and care services provided in skilled nursing facilities. Medicare Part B, the outpatient benefit, provides healthcare coverage for services provided in clinical settings like doctor’s offices. Medicare Part B also covers the cost of things like outpatient surgery and durable medical equipment.
Most people get premium-free Part A due to taxes paid while working, but there is an annual deductible that must be met before your benefits kick in. In 2023, the Part A deductible is $1600. Part B requires a monthly premium. The standard monthly premium for Part B in 2023 is $164.90. The Part B deductible for 2023 is $226.
Paying for the Use of Medicare Benefits
Medicare coverage may also require a copay or coinsurance amount to be paid when purchasing certain medical items or using certain services. Medicare Part B, for example, requires a 20% coinsurance amount from Medicare recipients for each outpatient service covered by Medicare Part B.
Medigap Coverage Can Offset Some Medicare Costs
If you’ve found that the costs associated with using Medicare, including premiums, deductibles and copay or coinsurance amounts, are a burden, Medigap coverage may help. Medigap coverage, also known as Medicare Supplement Insurance, is a type of coverage plan that helps to offset the costs associated with using Medicare benefits. Medigap plans are sorted into categories that are laid out with a lettering system. Plans available as Medigap coverage include plans A, B, C, D, F, G, K, L, M, and N. Please keep in mind that Plan C and Plan F are no longer offered to new Medigap enrollees, but if you had those plans prior to January 1, 2020, you may continue your coverage.
What Does Medicare Supplement (Medigap) Plan G Cover?
Plan G under Medigap includes coverage for coinsurance and copay amounts for both Medicare Part A and Part B. It also covers hospice coinsurance amounts, up to three pints of blood if you are injured and coinsurance amounts for skilled nursing facility care.
Plan G also provides coverage for Part A deductible amounts, but it does not cover Part B deductible amounts. In fact, as of January 2020, no new Medigap policy covers Part B deductibles. Currently, only Plans C and F cover Part B deductibles for existing Medigap recipients. Plan G does, however, cover 80% of a foreign travel exchange up to plan limits, and there is no out-of-pocket limit under this plan.
Prescription drug coverage
Medigap plans do not include any coverage for prescription drugs. If you need drug coverage,
Medicare Part D may be able to help. Part D provides insurance for the cost of certain prescription medications that are available for purchase from retail pharmacy locations. Medications covered by Medicare Part D must be listed in a Medicare recipient’s formulary, and medications must be able to be self-administered at home. Medicare Part D may require copays for medications each time Medicare recipients fill prescriptions.
You can get Part D coverage through a stand-alone Prescription Drug Plan if you have Original Medicare. As an alternative to Original Medicare, you can opt to get your benefits through a Medicare Advantage (MA) plan. MA plans are offered by private insurance companies who contract with Medicare to provide your Part A and Part B benefits. Most MA plans also include prescription drug coverage. Please note that you can’t buy a Medigap plan if you have Medicare Advantage.