Part A Deductible
You do not have to pay a monthly premium for Medicare Part A, which is the hospitalization coverage. If you are in the hospital for less than 60 days, you are not required to make coinsurance payments.
For longer stays that exceed 60 days, the coinsurance in 2022 will be $389 a day. For days 61 through 90, the coinsurance goes up to $389, and you are allotted 60 lifetime reserve days for stays that exceed 90 days. The reserve day coinsurance will be $778 when the new year arrives.
There is a per benefit period deductible that will be $1556 in 2022.
2022 Medicare Part B Premiums
The portion of the program that covers doctor’s bills is Part B, there is a monthly premium that has been $148.50 in 2021. This will rise to $170.10 for taxpayers that do not earn more than $91,000, and there are increased premiums for people in higher income brackets.
There is also a deductible of $233 in 2022, and 80 percent of covered costs are picked up by Medicare after you meet this deductible.
Medicare Part C (Medicare Advantage Plans)
Medicare Advantage Plans are offered by almost 4000 different private insurers. If you choose this option, you can essentially bundle all of these different parts. The premiums, coinsurance, and deductibles will depend on the details of the policy that you select.
Medicare Part D
The other portion covers prescription drugs, and once again, there are many options, and the out-of-pocket costs vary.
Long-Term Care Expenses
Did you notice that we did not explain the part of the program covers residence in a nursing home or any other type of custodial care? This was not an oversight because Medicare does not cover long-term care.
You can expect to pay over $120,000 per year for quality nursing home care in the Burlington, Vermont area, so the impact can be devastating. However, there is a solution if you implement a nursing home asset protection plan in advance.
Medicaid coverage extends to custodial care, but you are probably aware of the fact that it is only available to people with limited resources. The asset limit is $2000, so you have to transfer assets out of your name to gain eligibility.
This would be a simple matter if you could give your children their inheritances in advance right before you move into a nursing home. Unfortunately, there is a five-year look back period, so you are ineligible for 60 months after you divest yourself of assets.
You can use an irrevocable trust to address the challenge. You fund the trust with appreciable assets, and you can continue to accept distributions of the earnings to maintain your lifestyle. If and when you apply for Medicaid, the principal would not count.
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