Lowering Medicare Out-of-Pocket Expenses

Medicare comes with many out-of-pocket copays, deductibles, premiums, and other expenses, not to mention services you may have to pay for because Medicare does not cover them.

If you’d like a complete walkthrough of Medicare parts, enrollment windows, and coverage choices, see our Medicare Guide .

• Medigap Plans: You can purchase Medigap supplemental insurance to reduce your costs, essentially paying an additional premium to lower out-of-pocket expenses.
• Medicare Advantage Plans: Joining a Medicare Advantage plan may be another way to reduce overall healthcare costs.
• Federal and State Assistance: If your income is limited, you may qualify for government assistance programs to help with Medicare costs.

Medicare supplemental insurance, also known as Medigap, is private insurance you can purchase separately to reduce costs in the traditional Medicare program if you do not have other coverage. It helps cover copays, deductibles, and other expenses depending on the specific policy you choose.

To model how supplemental premiums and out-of-pocket costs affect your future finances, try our Retirement Calculator . You may also find our Retirement Planning Checklist useful for long-term planning.

• You must be enrolled in both Medicare Part A and Part B.
• You must pay a monthly premium in addition to your Part B premium.
• Medigap generally does not cover prescription drug costs unless you purchased a policy before 2006.
• If you are 65 or older, you receive important consumer protections when purchasing during specific enrollment periods.
• If you are under 65, federal protections may not apply, though some states provide similar rights.

Suppose You Have a Medigap Policy That Is No Longer Sold

Federal law simplified Medigap policies into standardized benefit sets, making them easier to compare. Some plans are no longer sold to new customers but can be kept by existing policyholders. If you still have one of these policies, your original benefits remain unchanged. However, premiums may increase over time as the group of insured individuals becomes smaller and older.

Buying and Choosing a Medigap Policy

If you decide to purchase a Medigap policy, compare available plans and insurance companies carefully to determine which best fits your healthcare needs and budget.

Assistance From the State

If affording basic care is difficult, you may qualify for state assistance programs. Many individuals who qualify do not apply because they are unaware of available benefits or how to access them.

Medicaid

Medicaid is a state-run program that supplements Medicare and can significantly reduce healthcare costs for individuals with limited income.

• Pays Medicare out-of-pocket expenses
• Covers extended skilled nursing stays
• Helps pay for items such as eyeglasses and hearing aids
• Covers long-term nursing home care
• Provides access to low-cost or free prescription drug coverage
• Requires income and asset limits set by the state
• Requires residency and legal U.S. status

Medicare Savings Programs

Medicare Savings Programs (MSPs) help pay premiums and, in some cases, deductibles and copays for individuals whose income and resources fall below state-specific limits.

• Qualified Medicare Beneficiary (QMB): Pays Part A and Part B premiums and other Medicare costs.
• Specified Low-Income Medicare Beneficiary (SLMB): Pays Part B premiums.
• Qualifying Individual (QI): Pays Part B premiums with slightly higher income limits.
• Qualified Disabled and Working Individuals (QDWI): Pays Part A premiums for certain disabled individuals who returned to work.

PACE Plans

Programs of All-Inclusive Care for the Elderly (PACE) integrate Medicaid and Medicare services to help individuals who would otherwise require nursing home care remain in their homes and communities.

• You are 55 or older.
• Your state certifies you as eligible for nursing home-level care.
• A PACE program serves your area and is accepting new enrollees.
• You are enrolled in Medicare, Medicaid, or both.
• You can live safely in the community with PACE support.

Other Costs Based on Your Situation

Costs vary depending on eligibility. If you qualify for Medicaid, expenses may be minimal. If not, you may pay monthly premiums for long-term care and prescription drug coverage under programs like PACE. Enrollment opportunities vary depending on your Medicare status and eligibility.

This Medicare resource was provided by Amerus Insurance Group, a nationwide independent agency that helps seniors confidently compare plan options, control out-of-pocket costs, and enroll with the right coverage for their doctors, prescriptions, and lifestyle. Whether you’re new to Medicare or reviewing your current plan, speak with an Amerus advisor for a free, personalized consultation.