By 2013, Part B premiums are set to increase from $99.90 to $104.90 per month. Premiums for Medicare Part B have been increasing gradually every year for the past five years. Still, that averages out to less than two percent per year, or about $8.50 over five years.
It’s fortunate that the news about the rise in premiums was released before the end of the Medicare annual enrollment Dec. 7. You still have time to find a plan that will cover more of the things Medicare doesn’t pay for and reduce your overall cost for health care.
Only one percent of people enrolled in Medicare pay Part A premiums. Part A covers inpatient hospitalization, care obtained in a skilled nursing facility, some home health care, and hospice care. You don’t have to pay for Part A if you paid payroll taxes for Medicare for 40 quarters, or you are married to someone who has. For the few who do pay for Part A, there’s good news. Those premiums will go down from $451 this year to $441 in 2013.
The deductible on Part A coverage is going in the other direction. It’s set to increase by 2.4 percent (from $1,156 in 2012 to $1,184 in 2013). The deductible is the amount you pay in out-of-pocket costs before you have coverage to go to the hospital. And, this is not an annual deductible. It’s tied to a benefit period that begins on the day you’re officially admitted to the hospital (not just held for observation), and it ends when you have not been in the hospital or a skilled nursing facility for 60 days in a row.
Since you are required to pay this deductible more than once in a year, it can be a hardship if you rely on original Medicare alone. It has no limit on either the number of benefit periods, or your yearly out-of-pocket expenses.
This is where the big difference lies between original Medicare and Medicare Advantage plans. Advantage plans do limit your annual out-of-pocket expenses, but the limits vary with each plan. The cap on out-of-pocket costs will be $6,700 or less. In 2013, the average limit is around $4,516, but it may be as low as $500 on health care provided by “in-network” providers. That means the doctors who have agreed to charge the insurance company lower than standard rates in exchange for patients being referred to them.
Fortunately, 2013 Medicare costs have been made available while there’s still time to shop for a plan that offers more coverage and/or reduces what you have to spend on health care next year. After the close of annual enrollment, most Advantage plans can’t sign up new members, so take this opportunity to see what’s available where you reside.
Jim McFadden has over 11 years of executive-level experience in the health insurance industry, is a youth baseball, softball and football coach, and has one of the worst fantasy football records in the world.