The total cost of Medicare varies among beneficiaries and depends on several factors. Medicare expenses tend to rise annually.
The Cost of Medicare Part A
Part A Premium
Most Medicare beneficiaries are eligible for premium-free Part A if they have worked and paid Medicare taxes for a minimum of ten years. However, if an individual has not met this requirement, they may need to pay a monthly premium of up to $506 for Part A. Those who have paid Medicare taxes for at least 30 quarters may be eligible for a reduced premium of $274 per month. Additionally, a married individual who has not paid Medicare taxes for ten years may still qualify for premium-free Part A if their spouse meets the requirement.
Part A Deductible
The Medicare Part A deductible is currently $1,484 per benefit period. Unlike most deductibles, this deductible is not based on an annual cycle. Instead, it applies to each benefit period.
A benefit period begins when a patient is admitted to the hospital and ends when the patient has been out of the hospital for 60 consecutive days. If the patient is readmitted to the hospital after that time, a new benefit period begins, and the deductible must be met again before Medicare benefits are paid.
Part A Copayments
Copayments for Medicare Part A are applicable if an individual has been in the hospital for more than 60 days or in a skilled nursing facility for more than 20 days in a benefit period.
The copayment amount varies based on the length of stay in one of the two facilities. Once an individual has been an inpatient for 100 days, their Part A benefits will be exhausted and they will be responsible for covering all expenses.
The Cost of Medicare Part B
Part B Premium
The current standard premium for Part B is $164.90, but beneficiaries in a higher income bracket may be subject to an additional fee called the income-related monthly adjustment amount (IRMAA). The premium is calculated based on the beneficiary’s tax return from 2 years prior. In most cases, the Part B premium is automatically deducted from the individual’s Social Security benefit.
Part B Deductible
Medicare Part B has a deductible of $226 that must be met before Medicare will cover outpatient services. However, this deductible does not apply to preventive care. For eligible individuals, the Extra Help program can provide assistance with Part B deductibles and coinsurance costs.
The Cost of Medicare Part C
Part C Premium
Medicare Part C offers many premium-free or low-premium plans, making them a popular choice among beneficiaries. However, there are also several drawbacks to consider. Individuals who require extensive medical treatment may face high out-of-pocket expenses with Part C plans.
Part C Deductible
Part C deductibles differ among plans, as some plans may not have a deductible for medical services but may have one for prescription drug costs. If the Part C plan includes a provider network, any services received from out-of-network providers or facilities will not count towards the deductible.
The Cost of Medicare Part D
Part D Premium
Part D premiums are subject to increase for high-income earners, similar to Part B premiums. If a single person earns over $87,000 or a married couple earns over $174,000, their premiums will be increased. Additionally, if a person delays Part D enrollment without having other creditable prescription coverage, a penalty will be added to their premium. The penalty is calculated by multiplying 1% by the national base beneficiary premium, which is currently $31.50, and then multiplying that number by the number of months the individual went without Part D coverage. This penalty remains in effect as long as the individual has a Part D plan.
Part D Deductible
Part D plans have a maximum deductible of $480. However, this deductible may not apply to all medications. If it does apply, the member is responsible for paying the full amount for the prescription until the deductible has been met. After that, the member will only pay the copay or coinsurance amount, which is based on the tier in which the drug is categorized.