If you have Medicare, you know that costs can add up quickly. The Part A deductible, which is the cost of a typical hospital stay, and the premium for Parts B and D combined, known as the premium-pay portion of your coverage, are two factors that can make it difficult to afford care. Fortunately, there are several ways to reduce your costs and control your out-of-pocket expenses when you have Medicare. We’ll explain how each method works and the pros and cons of each option. Keep reading to learn more about how to lower your Part A premium by yourself or with help from a spouse or other family member who also has Medicare.
Carefully Choose Which Parts of Medicare You’ll Pay For
Many people are surprised to find out that they can cherry pick the services that they choose to use their supplemental health insurance policy for. Depending on your plan, you may be able to cover only medical services and avoid any prescription drug costs. Or you might be able to include only what you need for a particular condition and forego routine care. You can also choose not to have Part A at all, but you’ll still be eligible for Part B and need to pay the full monthly premium. But if you have one of the conditions that makes you particularly susceptible to expensive medical problems, you may want to consider selecting only the Part B benefits.
Contract With a Private Health Insurance Provider
If you have Medicare, your insurance company may offer the option to contract with a private health insurance company to provide Part A and Part B benefits and reduce your monthly premium. You would still need to pay the full cost of Part B, which is currently $105 per month regardless of how much you make. The advantage of this option is that you would be able to select the specific doctors and hospitals you want to use. Alternatively, you could contract with a provider that has more favorable rates. However, you would need to inform the insurance company of any changes to your plan.
Use Part A and Part B Private Prescription Discounts
Part A covers the cost of inpatient hospital stays, but you can sign up for a private prescription drug coverage plan to reduce your Part B costs. This is an option that will be particularly appealing to people who take many medications. There are three major types of private prescription drug coverage plans:
– Medigap plans – also known as Medicare Supplement Insurance policies – are offered by private insurance companies approved by the federal government (not all are approved). You can choose a plan that has a fixed amount of coverage, a daily or monthly amount, or a combination of the two.
– Medicare Advantage plans – a Medicare plan offered by a private insurer – are another option that includes Part D coverage. Currently, there are 41 different plans that cover either all drugs or just a specified set of drugs. You can choose a plan that has a lower monthly premium, increased benefits, or a combination of the two.
– Medicare Supplement plans – are another option that combines Part A and Part B benefits. Like the other options, these plans include a private insurance company that is approved by the federal government, but instead of paying for Part B benefits, you can choose a plan that costs less.
Combine Parts A and B Into One Premium
Part B, which covers doctor’s visits, outpatient treatment and some prescription drugs, is free to Medicare beneficiaries. You might be able to save on this part of your insurance costs if you have a high-deductible health plan, a Health Savings Account (HSA), or other high-deductible account. Depending on your situation, going without costly tests and procedures may be beneficial, because it would mean you don’t have to pay for them and their costs go into your medical insurance premiums. For example, if you’re healthy and not likely to develop any serious illnesses in the future, this approach could save you significant money.
Go Without Particular Services When Possible
You may be able to save money on your Part A premium by avoiding some routine services. For example, if you don’t need diagnostic testing, you could forgo an EKG and other diagnostic imaging, which is currently included in Part A. If you can go without a particular test, you can reduce your premium. This would also be a good option if you think that you won’t ever be able to afford health care. Avoiding health care until you become eligible for Medicare could decrease your premium dollar-wise.
Add Additional Protection From Rising Costs with Part D Coverage
There are many types of Medicare supplement plans that provide additional protection from rising costs. For example, a Medigap plan might cover prescription drug costs, or a Medicare Advantage plan might cover additional medical services. You can also look into Medicare Advantage plans that include Part D coverage. These plans have a lower monthly premium, but you’ll need to pay for Part D prescription drug coverage as well.
Take Advantage of Consumer Protections for Older People With Long-Term Care Needs
One final way to reduce your Part A premium is to opt for coverage that includes free preventive services, such as screening tests and vaccines. This is a consumer protection, so you don’t have to pay for these services if you don’t need them. You can also save by comparing plans, selecting a plan with a low premium, and then adding on a few free benefits. This could lower your monthly premium significantly while also providing protection in case you need to use them in the future.
Medicare is a valuable program that provides you with health care coverage once you are eligible. However, a Part A premium is required and the cost of this coverage can be costly. There are ways to reduce the cost of your Part A premiums and improve your health care coverage. In addition to carefully choosing which parts of Medicare you will use, be sure to gather information about your premium. Many people don’t realize that they can reduce their Part A premium by paying the premium-only portion of their Medicare Part B. Additionally, consider contracting with a private health insurance provider to reduce your monthly Part B costs and go without certain services when possible. Finally, take advantage of consumer protections for older people with long-term care needs and consider adding additional protection from rising costs with Part D coverage.