The costs associated with Medicare depend on whether you have Original Medicare or a Medicare Advantage plan. Original Medicare is comprised of Part A and Part B. Similar to private health insurance, there are different classifications of costs:
- Premium: This is a flat monthly amount you pay for your plan each month, regardless of whether you use any services, which services you use or how often you use them.
- Deductible: This is a set amount per year that you pay out of pocket toward healthcare services before the plan starts paying anything.
- Coinsurance (also called copays or copayments): This can be a percentage of the cost of covered services that you pay directly to the provider or a flat amount.
Medicare Part A Costs
For most people, there is no premium for Medicare Part A. If you or your spouse did not work enough and pay enough in Medicare taxes to qualify for premium-free Part A, you may be able to get it by paying a premium.
In this case, you’ll pay either $274 or $499 per month, depending on how much you have paid in Medicare taxes while employed.
When you enroll in Medicare Part A, you have a deductible of $1,556 for each inpatient hospital benefit period. It’s possible to have more than one inpatient hospital benefit period in one year, since the period starts the day you are admitted as a patient and ends when you have not been admitted to inpatient care for 60 days in a row.
Medicare Part A copayments vary depending on the covered service and how long you need each one. You can find more detailed copay rates online at the Medicare website.
Medicare Part B Costs
Medicare Part B premiums are currently $170.10 per month. However, if you earn more than $91,000 if filing singly or $182,000 if filing jointly, you may pay as much as $578.30 per month.
Medicare Part B has other costs:
- Deductible: The deductible is currently $233 per year.
- Copayments: For most services, the copay amount is 20%. However, laboratory services, home health care and depression screening have a $0 copay.
Medicare Part C Costs
Medicare Part C (otherwise known as Medicare Advantage) plans are administered through Medicare-approved private insurance companies, so the costs vary. However, all Medicare Part C plans must cover the basics that are covered in Original Medicare.
Plans may have lower or higher copays for specific services compared to Original Medicare.
- Premiums: You’ll pay the Medicare Part B premium as well as the Medicare Advantage premium. However, some Advantage plans have $0 monthly premiums and may even help you pay part of your Part B premium.
- Copayments: These vary by plan. However, there is an annual limit on your out-of-pocket healthcare expenses of $7,550, not including prescription drug coverage. Many plans have a lower cap. For example, in Florida, the average in-network out-of-pocket spending limit is $4,884.
- Deductible: Most Medicare Advantage plans do not have a hospitalization deductible like Original Medicare. However, they do often charge a copay starting on the first day of hospitalization (unlike Original Medicare, in which copays start on day 61).
Medicare Part D Costs
Although it may seem like Part D is optional, you could pay a penalty for not having it. There are three options for Part D:
- Join Part D when you sign up for Original Medicare: Since Part D is offered through different companies, the premiums vary.
- Have a comparable plan: You could purchase a different creditable drug coverage plan, such as a plan from a current or former employer, union, TRICARE, Indian Health Service, VA or an individual health insurance plan.
- Get a Medicare Advantage plan: Most Medicare Advantage Plans include Part D or comparable coverage.
Copays vary depending on the available plans in your area and the prescription drugs you are taking. However, you can see how much each of your drugs would cost under Medicare Part D using Medicare’s online lookup tool. Medicare Part D and some Medicare Advantage plans include insulin coverage with a maximum copay of $35 for a month’s supply.
