Medicare has several parts and plans, and the cost of monthly premiums can add up. However, there are several ways a person may save money on healthcare costs.
According to the Kaiser Family Foundation (KFF), there were 67.7 million people enrolled in Medicare in 2020.
Also, a National Library of Medicine report showed that more than a quarter of people enrolled in Medicare spent
In this article, we describe Medicare plans, coverage, and premiums. We then look at ways a person can save money on healthcare costs, including premiums.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare is a federally funded program that provides health insurance to people aged 65 or older. Younger people with end stage renal disease, and with certain disabilities may also qualify for Medicare.
Medicare has several parts:
- Original Medicare includes Part A, inpatient hospital insurance, and Part B, outpatient medical insurance.
- Medicare Advantage (Part C) is an alternative, private insurance that offers the same coverage as Original Medicare.
- Medicare Part D provides prescription drug coverage.
Premiums vary across Medicare plans, especially for a person with Medicare Advantage (Part C) or a Part D plan. This online tool can help a person compare plans and costs.
Original Medicare (Part A and Part B)
According to Medicare, most people do not pay Part A premiums. However, if a person has to pay, the standard monthly premium in 2021 ranges from $259 to $471, the deductible is $1,484, and coinsurance ranges from $0 to $742.
A person must pay the premium for Part B, which is $148.50 each month in 2021. The premium may be higher, depending on a person’s income.
For 2021, the Part B deductible is $203 per year. After a person has paid the deductible, they generally pay 20% coinsurance of approved amounts.
Medicare Advantage (Part C)
Private companies provide Advantage plans, and the monthly premiums vary depending on which plan they have.
Medicare Part D
The Part D premiums also vary depending on the plan, and a person with a higher income level may pay a higher premium.
There are several ways a person can save on their Medicare costs. They include federal programs, pharmaceutical assistance, online tools, and insurance plans.
Extra Help is a government program run by the Social Security Administration (SSA). It helps a person save money on prescription drug program costs. The average annual savings is $5,000.
The program helps people pay their monthly premiums, annual deductibles, copays, and coinsurance. In 2021, a person with Extra Help pays a maximum of $3.70 for each generic medication or $9.20 for brand-name drugs.
If an individual’s annual income is below $19,140, and they have less than $14,610 in resources, they may qualify for Extra Help. For a married couple, the income ceiling is $25,860, and $29,160 is the upper limit for resources.
According to the U.S. Social Security Administration, resources do not include a person’s home, cars, possessions, life insurance, burial plots, burial contracts that cannot be changed, or back payments from social security, or SSI.
Medicare savings programs
There are four Medicare savings programs that can help pay some original Medicare premiums, including copays, deductibles, and coinsurance. The programs include:
- Qualified Medicare Beneficiary (QMB)
- Specified Low-Income Medicare Beneficiary (SLMB)
- Qualifying Individual (QI)
- Qualified Disabled and Working Individuals (QDWI)
A person can check with their state to see if they can get assistance from the savings programs.
Medicare Plan Finder
The Medicare Plan Finder is an online tool that can help a person compare plans and coverage options and find potential savings. A person can access the tool on a tablet, smartphone, or desktop computer.
The tool asks people some brief questions to find out more about them and then lists Medicare plans that might suit them.
A person can also compare various plan costs and benefits, search for brand name drugs and their generic alternatives, and create a personalized drug list.
Medigap is a supplemental Medicare insurance that may help a person save on some original Medicare costs, such as copays, deductibles, and coinsurance.
Private companies administer 10 different types of Medigap plans. A person can compare the various policies and their coverage using this online tool.
Pharmaceutical manufacturer patient assistance programs (PAPs)
PAP programs help people on a low income to pay for their out-of-pocket drug costs. Pharmaceutical companies operate these programs.
A person is enrolled in Medicare (Part D) may qualify for assistance. A person can check online to see whether the program covers the drugs they take.
State Health Insurance Assistance Program (SHIP)
The government funds SHIP. It provides free counseling by trained and unbiased volunteers who are experts in Medicare.
A person can ask questions about any aspect of Medicare, including how to lower their healthcare costs and make any complaints or appeals.
SHIPs may have different names in various states, such as Community Leaders Assisting the Insured of Missouri (CLAIM) and Health Insurance Information, Counseling, and Assistance (HIICAP).
A person can use this online tool to find their local SHIP.
These are some additional ways that Medicare beneficiaries can save on their prescription drug costs.
People could consider using
According to the Food and Drug Administration (FDA),
If an individual needs to use a brand name drug, they might consider buying a larger supply of any long-term medications. If a person can buy a 90-day supply rather than a 30-day supply, they will save money by paying fewer copayments.
A person can
Pharmacies that do not have a physical location can save money on rent and staffing costs and pass any savings to their customers.
A person can order online, and the company will deliver the drugs to their homes, saving both time and money.
Several state and private programs may help a person save money on Medicare premiums.
Also, a person may be able to reduce costs by using generic drugs or ordering through online pharmacies.