How much does Medicare cost?

Cost can be a big determining factor when deciding which Medicare plan is best for you. There are some pieces of Medicare that have pretty straight-forward premiums, deductibles and coinsurance. However, there are other parts with a lot of variables that determine cost.

Take a look at this brief overview of Medicare costs, and then we’ll dive into some specifics.

Chart of 2020 Medicare Costs at a Glance

Premiums, deductibles and coinsurance

Medicare Part A

Medicare Part A is often premium-free for those who paid Medicare taxes while working for a certain amount of time. If your work history does not meet the requirements, you can still purchase Part A.

Those who are not eligible for premium-free Part A and do not sign up when first eligible to enroll in Medicare will likely see consequences of delayed enrollment. These individuals can end up paying up to 10 percent more on their premium for up to twice the number of years they were eligible for Part A.

In addition to the monthly premium, there is also a deductible of $1,408 for each benefit period and coinsurance for day 61 and over of being in the hospital.

Medicare Part B

The standard premium for Medicare Part B in 2020 is $144.60 per month.  This cost is applicable to people with an individual annual income of $87,000* or less and those who are married and filed a joint tax return with income of $174,000* or less. This premium is generally paid out of your monthly Social Security check, but a quarterly payment plan can be set up if you are not drawing social security.

If your income reported to the IRS from two years ago* is higher than what is noted above, you will end up with a higher monthly premium for Part B.

The deductible for 2020 is $198 for Part B. After this deductible is met, you will typically pay 20 percent of the Medicare-approved amount for most out-patient services including doctor services, outpatient therapy and durable medical equipment.

Medicare Advantage (Part C)

There are a lot of variations in cost when it comes to Medicare Advantage plans. Some plans have a monthly premium and others do not. Some charge for additional benefits, while others do not.

Because there are so many alternatives, specific costs need to be confirmed with individual plan providers. Each year, companies set their prices for covered services, and this cost can only change once a year on January 1.

Medicare Part D

The monthly premiums for Part D, or prescription drug plans, also vary by plan.  The types of prescriptions covered and the pharmacy used do play into the actual cost. Both of these aspects are outlined with each plan.

These plans are similar to Part B in that your income from two years ago* will be referenced to determine your actual premium. High income earners will pay an income-related monthly adjusted amount in addition to the Part D standard premium.

*Income is based off your tax returns from two years prior, as this is the latest information provided to Social Security by the IRS.

Medicare Supplement Insurance

If you enroll in Original Medicare, separately known as Part A and Part B, you will still be responsible for your deductible and coinsurance in addition to your monthly premium. These costs can really add up, so Medicare Supplement Insurance, also known as Medigap plans, can be purchased to help cover the costs of your deductible and coinsurance.

While the actual premium for these plans will vary by company, the chart below shows basic information about the different benefits covered by each Medicare Supplement Insurance plan. The percentage listed is the amount covered by that plan’s benefits. The beneficiary is obligated to pay the remaining percentage, if any. There is no coverage for the benefit if the option is blank.

Chart of 2020 Medicare Supplement Insurance Plan Benefits
1 Plans F and G also offer a high-deductible plan in some states. With this option, you must pay for Medicare-covered costs (coinsurance, copayments, and deductibles) up to the deductible amount of $2,340 in 2020 before your policy pays anything. (Plans C and F aren’t available to people who are newly eligible for Medicare on or after January 1, 2020.)
2 For Plans K and L, after you meet your out-of-pocket yearly limit and your yearly Part B deductible ($198 in 2020), the Medigap plan pays 100% of covered services for the rest of the calendar year.
3 Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don’t result in an inpatient admission.

Find out exact costs for you

Because of the different options available to you when it come to plan type and company providers, there’s no way to identify in a blog post what the specific cost of Medicare insurance will be for each reader.

You do deserve to find out though!

Contact us today and our experienced team will walk you through your options, look at cost comparisons for each and get you enrolled in a Medicare plan that is right for you.  

Not affiliated with the U.S. government or federal Medicare program.

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