Prepare for Out of Pocket Medicare Costs | Rochester, NY Estate Planning Attorneys

When you are working and paying FICA or self-employment taxes, it can seem like the money is going into a black hole, but in fact, you get something for your contributions. You earn one retirement credit for every $1360 that you pay taxes on in 2019. The maximum annual accrual is four credits.

As you can see, this is a modest requirement, and we should point out the fact that this exact figure is adjusted annually to account for inflation. After you have at least 40 credits, you will qualify for Medicare when you reach the age of 65.

This is the eligibility age at the time of this writing, but it is always subject to change via legislative mandate. There have been lawmakers that have suggested raising the age in an effort to cut costs, so this is something to stay abreast of when you are looking ahead toward your retirement years.

What to Expect

Medicare coverage will provide a very strong health insurance foundation when you become eligible, but you should be aware of the out-of-pocket costs that can enter the picture. The program is divided up into four different parts, so we will look at each of them individually here.

Medicare Part A

The first portion of the Medicare program is Part A, and this is the component that covers inpatient hospital care. There is no monthly premium, but there is a deductible for each coverage period.

During the current calendar year, it is $1364, and this is another one of the parameters that will be changed annually as inflation takes its toll. There is no coinsurance for the first 60 days, but for days 61 through 90, there is a $341 per day coinsurance responsibility that would come out of your pocket.

Coinsurance goes up to $682 daily for 91 days or more, but there is a lifetime ceiling of 60 days past the 90 day threshold. If you use up the entirety of this benefit, you are on your own going forward.

Medicare Part B

When you visit a physician or receive outpatient care as a Medicare recipient, you would use Part B to cover some of the costs. We say “some” because you would be required to pay 20% of the bills yourself. The deductible is $185, and there is also a monthly premium that stands at $135.50 this year.

Medicare Part C

It is possible to use your benefit to enroll in a Medicare Advantage plan that you would purchase from a private insurance company. This would provide a level of coverage that would fill some of the gaps that we are explaining here, so you may want to take a long look at this option.

Medicare Part D

The final piece to the puzzle is the prescription drug component, which is Medicare Part D. There are premiums, coinsurance, and deductibles that must be paid for this coverage, and there are multiple options available, so the details vary.

Long-Term Care

Medicare will pay for convalescent care after an injury or illness when no further care will be required after recovery. However, it does not pay for custodial care, and this is the type of assistance that you would receive in a nursing home or assisted living community. This is a very important piece of information, because these facilities are extremely expensive.

Schedule a Consultation Today!

We are here to help if you would like to develop a plan for aging in light of these out-of-pocket expenses. You can request a consultation appointment if you send us a message through our contact page, and our phone number here in Rochester is 585-374-5210.