Medicare isn't free. It's important to pay attention to more than just monthly premiums.
The amount you pay depends on the coverage you choose and the health care services you receive. And don't forget to see if you qualify for help with your Medicare costs.
What is a premium?
A premium is a set amount (often monthly) you must pay for coverage. Depending on which type of coverage you choose, you may pay a premium to Medicare, to a private insurance company like UnitedHealthcare, or both.
Which costs might I share with Original Medicare or my plan?
"Cost sharing" is a term used to describe the way Original Medicare or your plan shares your health care costs with you. Here are the most common types of cost sharing:
This is a set amount that you pay out-of-pocket for covered services before Medicare, your Medicare Advantage plan, and/or your Prescription Drug plan start to pay. If you have a Medicare Supplement insurance plan, this is the amount your plan may help pay after Medicare pays, depending on the plan you choose.
1 You pay first, up to the deductible
2 Medicare and/or your plan begins to pay
An amount you may be required to pay as your share for the cost of a covered service. For example, if you have prescription coverage, you might pay $10 each time you fill a certain prescription. If you have a Medicare Supplement plan, copayments paid by the plan are either paid in full or a percentage of the copayment is paid, depending on the plan you choose.
1 You pay a fixed amount
2 Medicare Advantage or Prescription Drug plans: They will be billed for the rest
The amount you may be required to pay as your share for the cost of a covered service. For example, Medicare Part B pays about 80% of the cost of a covered medical service and you would pay the rest.
There are Medicare Supplement Insurance Plans with low to no coinsurance options. Depending on the plan you choose, you may get help paying the Part A and/or Part B coinsurance amounts.
Medicare Costs You Could Pay
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ON SCREEN TEXT: What are the costs you could pay with Medicare?
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ON SCREEN TEXT: There are four kinds of costs you may pay with all Medicare plans.
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ON SCREEN TEXT: 1 Premiums A fixed amount you pay to Medicare, a private insurance company, or both. Premiums are usually charged monthly and can change each year.
ON SCREEN TEXT: January June February April May
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ON SCREEN TEXT: 2 Deductibles A set amount you pay out of pocket for covered health services before your plan begins to pay.
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ON SCREEN TEXT: 3 Co-payments A fixed amount you pay when you receive a service covered by Medicare. Your plan pays the remaining amount.
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ON SCREEN TEXT: 4 Co-insurance This is when you and your plan split the costs of a covered service. How much you pay and how much the plan pays can vary based on the plan.
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ON SCREEN TEXT: Medicare Made Clear® by UnitedHealthcare
Are there costs I'll have to pay out of my own pocket? And are there plans that limit out-of-pocket spending each year?
The out-of-pocket maximum is the maximum amount you will pay out-of-pocket in a plan year before your Medicare plan begins to cover 100% of the costs associated with your medical services. Original Medicare does not have an out-of-pocket maximum.
The costs you might have to pay out of your own pocket depend on the type of coverage you have. Some plans, like Medicare Supplement plans, help to limit those out-of-pocket costs.
Original Medicare (Parts A and B):
Original Medicare has no annual out-of-pocket maximum. You might be responsible for the following costs with Original Medicare:
Part A premium
Part A deductible ($1,484 in 2021) and coinsurance
Part B premium
Part B deductible ($203 in 2021) plus the coinsurance after the Part B deductible is met and Medicare has paid its share
Medicare Advantage (Part C) plans:
Medicare Advantage plans limit how much you'll pay out of pocket every year. After you reach the annual out-of-pocket maximum, your plan will pay all of your costs for Medicare-covered services for the rest of the period (usually a calendar year). Costs that don't apply to your annual out-of-pocket maximum include premiums, Part D prescription drugs, and extra benefits your plan might have that aren't covered by Original Medicare.
Medicare supplement plans are designed to help limit out-of-pocket costs by helping to pay for some of the costs Original Medicare doesn't pay. There are Medigap plan options available with low to no copays. For example, the only out-of-pocket costs associated with Plan G would be your monthly premium and the annual Part B deductible ($203 in 2021). Medigap plans offer peace of mind with predictable out-of-pocket costs. Benefits and costs vary depending on the plan you choose.
Two Medigap plans do have a yearly out-of-pocket limit. These plans, Plans K and L, offer a lower monthly premium than other Medicare supplement plans because they pay a percentage of the coinsurance and you pay the rest. Once you meet the annual out-of-pocket limit, the plans pay 100% of covered services for the rest of the calendar year. Please note that the benefits, if covered, are covered 100% by most plans.
Most people don't pay a premium for Medicare Part A. You won't pay a premium for Part A if you or your spouse worked and paid Medicare taxes for at least 10 years.
You're required to pay a deductible before Medicare Part A starts paying part of your costs.
For inpatient hospital and skilled nursing facility stays, you are responsible for any coinsurance after Medicare has paid its share.
Medicare Part B Costs:
Your monthly premium for Medicare Part B depends on your monthly income.
You're required to pay a deductible before Medicare Part B starts paying part of your costs.
Once your deductible is met, Part B generally pays 80% of Medicare-approved costs and you're responsible for the rest.
What if I need help paying Medicare costs?
You may be eligible for financial assistance to cover your health care expenses. There are several programs that help pay Medicare costs. Many people who could qualify never sign up, so be sure to apply if you think you might qualify. Don't hesitate to apply. Income and resource limits vary by program.
Extra Help program:
Helps pay some or all Medicare Part D premiums, deductibles, copays and coinsurance for those who qualify.
Provides health care coverage for individuals and families with limited incomes. It may also include some services not covered by Medicare, like prescription drugs, eye care or long-term care—at no or low cost. If you have both Medicaid and Medicare, you may be eligible for a Dual Special Needs Plan (D-SNP).
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AARP® Medicare Supplement Insurance Plans
AARP endorses the AARP Medicare Supplement Insurance Plans, insured by UnitedHealthcare Insurance Company.
Insured by UnitedHealthcare Insurance Company, Horsham, PA (UnitedHealthcare Insurance Company of New York, Islandia, NY for New York residents). Policy form No. GRP 79171 GPS-1 (G-36000-4).
In some states, plans may be available to persons under age 65 who are eligible for Medicare by reason of disability or End-Stage Renal Disease.
Not connected with or endorsed by the U.S. Government or the federal Medicare program.
This is a solicitation of insurance. A licensed insurance agent/producer may contact you.
You must be an AARP member to enroll in an AARP Medicare Supplement Plan.
THESE PLANS HAVE ELIGIBILITY REQUIREMENTS, EXCLUSIONS AND LIMITATIONS. FOR COSTS AND COMPLETE DETAILS (INCLUDING OUTLINES OF COVERAGE), CALL A LICENSED INSURANCE AGENT/PRODUCER AT THE TOLL-FREE NUMBER ABOVE.
Medicare Advantage plans and Medicare Prescription Drug plans
Plans are insured through UnitedHealthcare Insurance Company or one of its affiliated companies, a Medicare Advantage organization with a Medicare contract and a Medicare-approved Part D sponsor. Enrollment in these plans depends on the plan's contract renewal with Medicare. You do not need to be an AARP member to enroll in a Medicare Advantage plan or Medicare Prescription Drug plan.
This information is not a complete description of benefits. Contact the plan for more information.