If you are familiar with any other kind of Medical Insurance plan, you are probably already familiar with the basic idea of premiums and deductibles. It surprises some people to learn that with Medicare Advantage and other Medicare plans, you will also encounter these charges. When you are working with a Medicare Part C plan, you will generally find that there is a broader range of potential costs associated with your treatments and medical procedures. However, even when you are only enrolled in Original Medicare, you will still have to remember that some monthly charges are a part of your healthcare budget.
One of the ways to keep your monthly payment or premium low is to ensure you enroll in your plan during the given enrollment period each year. When you choose to do this in Original Medicare, you can avoid a 10% late enrollment penalty. You should also be sure to make all of your coverage changes and selections pertaining to Medicare Advantage when you are in the enrollment period. Failing to do so will result in much higher monthly charges without any benefit whatsoever to you. For example, Original Medicare Part A monthly premiums are already set at over $400. With late penalties, it can be nearly $500.
So, premiums are the monthly amount that you pay to ensure that your insurance policy remains in force. What are deductibles? The “deductible” amount is the amount that you must pay each year before Medicare Advantage will begin paying for covered services. The deductible and the premium are two separate items — you always pay a premium, each and every month, whereas the deductible is a cumulative amount that you need only pay — in total — once a year before you begin to enjoy the full coverage that you expect from your Medicare policy. There are separate deductibles for Part A and Part B.
Because Medicare Advantage plans are structured very similarly to Original Medicare, you will probably see that there are few major differences in how premiums and deductibles are handled or calculated. However, if you start looking at coverage for treatments that are not covered under Original Medicare, you’ll have the opportunity to compare premiums and deductibles across multiple providers to find the best deal for you. This can help you to save money — although it will not reduce the costs of your premiums and deductibles over the cost of Original Medicare, it is possible to make sure that your levels of protection will be better.