When Medicare was created in 1965, it consisted of two parts: Part A was free, covered hospitalizations, and was given to everyone who had hit 65 and had worked long enough. Part B covered “everything else” except prescription drugs and had a monthly premium set so that the government paid 80% of the total cost of the program and enrollees paid the other 20%. Enrollment in Part B was voluntary.
In 2019, the monthly premium for the vast majority of part B enrollees is $135.50. This is adjusted upward for those with high incomes. The annual cost is thus $1,626 for most people.
The available alternatives depend on your specific situation. If you are still working and/or covered by a health plan from an employer who has more than 20 full-time equivalent employees, you can continue on that health plan and not take part B until you either quit working, or the plan renews and requires you to take part B for the renewal. Many plans are designed to require you to enroll in Parts A and B as soon as you are eligible, and become, in effect, “Medigap” policies, covering your Medicare deductibles and co-payments and possibly offering some benefits that Medicaid does not. This is affected by your employer’s policies, their health insurer’s policies, and state laws. Check with your Human Resources department for all the applicable details.
Some employer insurance plans offer a rebate of part of your Part B premiums. Check with your plan administrator.
Another alternative is Medicare Advantage (“Part C” of Medicare.) Medicare Advantage Plans replace Parts A and B (“Original Medicare”.) Medicare Advantage plans may charge no additional premium but require you to enroll in Part B. Starting in 2019, Medicare Advantage plans may, but are not required to, offer additional benefits such as modifications to the home to aid mobility, in-home non-custodial care, and transportation to medical appointments, which are not available under original Medicare.
Although not strictly an alternative to Part B, Medicare Supplement (“Medigap”) plans pay for the Medicare deductibles and co-payments and may offer some additional benefits, such as care outside the United States, which Original Medicare does not cover. Medicare Supplement Plans, with a few exceptions, are uniform across the United States and are regulated by the Centers for Medicare and Medicaid Services, the Federal government agency that runs Medicare.
Keep in mind that, depending on your needs and state of health, prescription drug costs may be the biggest part of your health care costs. Original Medicare and Medigap plans do not cover prescription drugs except under very limited circumstances. If you are enrolled in Original Medicare with or without a Medigap plan, you should also investigate a Part D plan to cover prescription drugs. These plans are standardized throughout the United States.
If you do not enroll in Medicare Part B or D when first eligible, you may have to pay a penalty in the form of a higher premium when you do enroll. These penalty provisions do not apply if you have been continuously enrolled in a Medicare Advantage Plan and decide to move to Original Medicare.
Once you are eligible for Medicare, you want to make sure that as much of your medical expenses that Medicare does not cover are taken care of, that any additional services that Original Medicare does not provide are covered, and that all that coverage is at a price that you can afford. Your best course is to consult a professional insurance broker who represents multiple plans and programs call 844-236-0228 to speak with someone directly.