2018 Medicare Update – Strictly Business February Issue
In 2015, Forbes reported that 10,000 Americans are enrolling in Medicare each day. The statistics from CMS.gov show that Medicare enrollment totaled 58.9 million people in November 2017. The US population is approximately 325 million. Over 18% of the population is enrolled in Medicare, and the number will continue to climb as the Baby Boomers reach age 65. We all have parents, family members, friends, and co-workers that use Medicare as their primary source of health insurance.
The original Medicare law was passed in 1965. The concept was simple – Medicare would provide health insurance to those age 65 and older. Most of that law remains in force today. Medicare Part A provides benefits for in-patient services at hospitals and skilled nursing facilities. Part B includes out-patient services such as doctors, lab work, imaging, physical therapy, outpatient procedures, and durable medical equipment. Medicare Parts C & D were added to the law and provide 2 insurance products for Medicare beneficiaries. Medicare Part C is known as a Medicare Advantage Plan and Medicare Part D is for Prescription Drug Plans. Medicare Supplement plans are insurance policies sold by insurance companies that offer benefits that pay most of the portion of costs that are not covered by Medicare.
Those born in 1953 will be Medicare eligible on the first of the month in 2018 in which their 65th birthday occurs. We recommend that you meet with your insurance agent to review your Medicare coverage choices about 90 days before you will be eligible. This is true even if you plan to continue working and will have the option to continue your employer provided health insurance benefits. It may be in your best interest to discontinue the employer plan and transition to Medicare.
The premium for Medicare Part A is generally $0. The standard Part B monthly premium in 2018 is $134. Those with higher incomes pay a higher premium. The upcharge is referred to as IRMMA (Income Related Monthly Adjustment Amount) and is based on the modified adjusted gross income (MAGI) that was reported on your IRS tax return from 2 years ago. IRMMA impacts those with MAGI over $85,000 filing an individual tax return and over $170,000 for a joint tax return. If your MAGI is between $170,000 and $214,000 on a joint tax return, the IRMMA upcharge is $53.50 per month. The maximum upcharge for 2018 applies to MAGI over $160,000 individual / $320,000 joint and is $294.60 per month additional premium. The IRMMA upcharge is also applied to Part D Prescription Drug Plans; however, it is a much smaller amount.
The first question that most people want to know is how much it will cost for Medicare coverage. This estimate assumes that a Medicare Supplement and Prescription Drug Plan are used.
|Medicare Part A||$ 0|
|Medicare Part B||$134|
|Prescription Drug Plan (varies based on medication costs)||$30 – $150|
|Total for average 65 year old that chooses a Medicare Supplement & Part D plan||$280 – $400|
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