Costs of Medicare

Having a clear idea of the costs of Medicare can help you feel in control, set up a budget, and help you find the policy you can afford.

Some costs are more obvious than others. We’ll define key terms and give you an overview of what you can expect to pay for your Medicare coverage.

Clear Health Insurance Costs

Premiums, deductibles, coinsurance, and copayments are fairly obvious health care expenses. You might already know these terms. If not, here’s what they are:

Premium: This is the amount of money your insurance company charges you for the plan you picked. It’s typically paid each month, although it can be billed in different ways. You have to pay your premium to maintain coverage, no matter if you use it or not.

Deductible: This is a set amount you must pay annually toward your medical bills — before the insurance company begins paying. Deductibles vary by Medicare plan. Some don’t even have one.

Coinsurance: The percentage of the medical bill you share with your insurer after paying your deductible. Unless you buy a policy with 100% coverage for everything (like Medigap Plan F), you must pay a coinsurance amount.

Copayment or copay: This is the fixed rate you pay each time you visit the doctor or fill a prescription. For example, your plan might have a small $20 copay for standard doctor visits. Each time you go, you pay $20, and this amount doesn’t count toward your deductible.

When choosing a Medicare plan that falls within your budget, look at the clear costs you may expect to pay and think about the less obvious costs.

Get a free medicare Consultation

Other Health Insurance Costs

Any insurance plan has some things that could be partially covered or not covered whatsoever. These expenses contribute to the total costs of your healthcare. Less noticeable fees can include:

  • Late enrollment penalties
  • Services provided by a doctor or hospital outside of your plan’s network
  • Plan limits for unique care types, like a limited number of physical therapy visits per benefit period.

Medicare Costs in 2021: An Overview

Part A premium

Most people don’t have to pay one.

Part A hospital deductible and coinsurance

You pay:

  • $1,484 deductible for every benefit period
  • Days 1-60: $0 coinsurance
  • Days 61-90: $371 coinsurance/day of each benefit period
  • Days 91 and after: $742 coinsurance for each lifetime reserve day — following day 90 for each benefit period.
  • Beyond lifetime reserve days: ALL costs

Part B premium

The standard amount is $148.50, or higher, depending on your income.

Part B deductible and coinsurance

$203. After meeting your deductible, you usually pay 20% of the Medicare-approved amount for most doctor services.

Part C premium

Varies by plan.

Part D premium

Also varies by plan. Higher-income people may pay more.

Medicare Part A Costs

If you don’t qualify for premium-free Part A, you’ll pay at most $471 per month in 2021. 

If you don’t buy Part A when you’re first eligible, your premium may increase by 10%.

See the chart above for specific hospital insurance costs. 

Costs will vary if you have Parts A and B (Original Medicare). You may need home health care or hospice care, or you may stay in a skilled nursing facility, mental health facility, or a hospital. You can view more details here.

Medicare Part B Costs

First, you’ll pay a standard premium (or higher if you make more money) of $148.50. 

You should sign up when you’re first eligible, or you’ll pay a late fee for as long as you’re enrolled in Part B.

If you have Original Medicare, you’ll pay $203 in 2021, which is the Part B annual deductible. Once you hit your deductible for the year, you usually pay 20% of the amount approved by Medicare for the following:

  • Most doctor services — including those while you’re a hospital inpatient
  • Durable medical equipment 
  • Outpatient therapy

So remember the 80/20 rule. 

Medicare Part C Costs

Medicare Part C (Medicare Advantage) plans have a monthly premium. It will vary by program, and so will the deductibles, copays, and/or coinsurance. 

Call Midwest Trusted Benefit for more details.

Medicare Part D Costs

The Part D (Medicare’s prescription drug coverage) monthly premium also varies by plan. Higher-income users may pay more.

You might owe a late enrollment fee if you wait to sign up after your Initial Enrollment Period ends. The cost of this depends on how long you went without Medicare Part D. 

The amount you pay for deductibles, copayments, and coinsurance varies by plan, too. 

Costs of Medigap Policies

Every insurance company sets the price (premium) for its Medicare Supplement (Medigap) plans. The way they determine the price impacts how much you pay in the present and future.

A Medigap policy can be rated in three ways:

  • Community-rated or “no age-rated”
  • Issue-age-rated or “entry age-rated”
  • Attained-age-rated

The cost of these supplements can vary immensely. Different companies can charge different premiums for the exact same coverage. That’s why it’s important to compare the same policy with different companies, and an insurance agent can help you find the best rate.

The cost of your policy might also depend on whether the carrier:

  • Offers discounts for women, non-smokers, or married couples
  • Uses medical underwriting or “Medigap protections”
  • Offers a high-deductible option for Plan F or Plan G
  • And more

If you’d like to compare costs for certain Part C or Part D plans, contact a licensed agent today.