The Medicare website predicts that a person in “good health” will spend about $7,850 out-of-pocket on Medicare coverage every year (about $650 per month). That amount increases dramatically (to more than $1,000 per month) for people who have had a heart attack, have diabetes, or suffer from congestive heart failure. These payments come from all over, including monthly premiums, deductibles, prescriptions, and paying the remaining costs for the services.
Here, we will discuss what you should expect from your bills (from all parts of Medicare) and how you can help yourself in the billing process when it comes to finally paying the bills.
Original Medicare Bills (Parts A & B)
Your monthly Part B premium will be taken out of your monthly Social Security check. If you aren’t collecting on Social Security yet, you will have to pay Medicare directly either online or through a check until you do. If you do have a premium for Part A (most people don’t), it will be taken out of your Social Security check as well.
Aside from your premiums, some part A and B services you should expect to be billed for include the following:
- Twenty percent of all Part B services (such as durable medical equipment, ambulance services, and doctor services)
- Hospital costs (after 60 days)
You will be billed for these either before you get your services (most likely when you’re going in for a routine check up or second opinion), or you will be sent a bill afterward. You will be responsible for paying the provider of your services or Medicare. If they pay your provider directly, you will reimburse them for the costs they don’t cover.
Medicare will send you a Medicare Summary Notice (MSN) in the mail every three months to remind you which services you’ve received under Medicare over the previous three months. This notice could trigger your memory of bills you still have to pay to Medicare or the place that provided your service. You will also get an explanation of benefits (EOB) letter that details exactly what was and wasn’t covered for the service provided.
Advantage Plan Medicare Bills (Part C)
You will then be billed for all other non-covered costs such as copayments, deductibles, and coinsurance by the insurance company or the place providing your services.
No matter which Medicare Advantage plan you get, they will cover the same things that an Original Medicare plan will. What makes these plans so attractive is that they also provide coverage for services such as prescription drug coverage, vision, and dental. The billing process for Part C plans is similar to Original Medicare: you will pay your monthly premium to whichever private insurer you choose to get your plan from. You will then be billed for all other non-covered costs such as copayments, deductibles, and coinsurance by the insurance company or the place providing your services. These costs vary per Part C plan, so check with your provider to determine the out-of-pocket costs. Your Medicare Advantage plan will have an out-of-pocket maximum each year, too. This means that if you pay a certain amount of money out-of-pocket aside from your premiums—typically, it’s at least several thousand dollars—then you won’t have to pay anything out-of-pocket the rest of the year. With a Medicare Advantage plan, you will also have to pay your Part B premium every month on top of your Part C premium. As mentioned, the Part B premium will be taken out of your Social Security check every month. If you aren’t collecting on Social Security yet, you will have to pay Medicare directly.
Billing for Prescription Drug Coverage (Part D)
Prescription drug plans come with a monthly premium. This number can range anywhere from a couple hundred dollars per month all the way down to $0. The average monthly premium, though, is $41 as of 2018. This doesn’t apply to people who have their prescription coverage through a Part C plan. After that, the price you pay for your prescriptions will vary, and it will will depend on if the prescription is covered by the plan you chose. This is why it’s important to do lots of research on prescription plans, because you don’t want to be left with a plan that doesn’t cover what you need for a full year. You will also have a deductible you need to reach before the prescription plan begins covering your drugs. The maximum deductible is $405 as of 2018. After you’ve hit your deductible, you will pay for whatever isn’t covered for prescriptions to the pharmacist.
How To Organize Your Medicare Bills
Medical bills stemming from Medicare coverage can pile up quickly, especially if you’re using the services frequently. For example, if you see multiple doctors, they can then prescribe multiple prescriptions. This means you’ll you have to worry about bills from those doctors on top of paying for all your prescriptions.
You can write these lists by hand in a notebook or input them into a spreadsheet on your computer by using Google Sheets or Microsoft Excel.
In order to help streamline paying all your bills, here are some organizational tips that can help you make sure you’re paying your bills on time and in an orderly fashion:
Make A List Of The Services You’ve Received:
Whenever you receive a service through Medicare, write down the date, the doctor you visited, and the services you received. This can help you remember at later dates what it is you’re paying for and also help you notice if doctors try to charge you for any services you didn’t receive.
Make Note Of What You’ve Paid For So Far:
Alongside this list of services, make note of which services you paid for, such as copays for the visit or all the services once they’ve been done.
File Bills By Due Date:
Once you get a bill in the mail, file it in a folder with the soonest-to-be-paid bill first. It’s nice that you sometimes have a few months to get around to paying a bill, but you don’t want to put it at the bottom of a pile and forget about it. Make sure the bills are in order by due date so you know the one on top also needs to be paid next.
Reference Your Medicare Summary Notice:
This will help refresh your memory on the services you’ve received over the previous three months, and you can use it to reference your own list of services you’ve received to make sure everything checks out.
Save Your Receipts:
Store the receipts for services you have paid in a folder, filing cabinet, or any safe, organized place you can access easily in case you need to prove you have paid for something or to make sure you don’t pay for something twice.
You can write these lists by hand in a notebook or input them into a spreadsheet on your computer by using Google Sheets or Microsoft Excel. These are all really easy to reference when you’re looking back to find what you paid for and when.
All of these bills can add up and become confusing, no matter how organized you keep everything. Late bills, even for just a few hundred dollars worth of services, can snowball into thousands of dollars of late fees. In addition to following the above organizational tips, you can also purchase supplemental insurance—known as Medigap—to help bring all of your services not covered by Medicare under one roof. This also compiles them into a single, easy payment.
Medigap is a program created to help offset payments such as:
- Part A and B coinsurances
- Hospital costs for up to 365 days after Medicare services run out
- Part A and B deductible
- Foreign travel insurance
Medigap can only be purchased if you have an Original Medicare plan. It doesn’t cover out-of-pocket costs for Medicare Advantage plans or prescription drug plans.
These supplemental plans are purchased through private insurers, and they come in various forms and cover different out-of-pocket costs. For example, some Medigap plans will cover all of the coinsurance of skilled nursing care facility services, others will only cover 50 percent of the coinsurance, and some won’t cover it at all. You can view all the different type of Medigap plans and what they cover here. You will have to contact private insurers to find out the rates they offer for these plans.
The average Medigap plan in 2018 cost about $143 extra per month and that’s in addition to other Medicare premiums. Do you pay more than this in out-of-pocket costs for your healthcare services every month? Medigap may help you to reduce that cost.
If you have any questions regarding your Medicare bills and what might come from them, contact your local Social Security Administration office, the private insurer providing your Medicare plan (if you went with this option), or the facility providing your services.