How much does Medicare cost?

Trying to estimate your medical costs is a difficult and often frustrating task. On most health insurance plans, you pay a monthly premium, and then pay “full price” for care until you reach your deductible. Once that’s met, you pay a smaller fixed amount, either through copays or coinsurance, each time you access care. Once you’ve reached your plan’s out-of-pocket maximum, your plan steps in and you don’t pay anything more for covered care. That’s assuming everything works as planned.

For better or worse, Medicare works the same way, but it’s actually a little clearer than other health insurance plans because the federal government sets the prices for most services. Even so, there are still a lot of numbers to juggle. We’ll walk you through all the different costs you’ll encounter while using Medicare. We’ll also give an overview of the many programs offering financial assistance to those who need it.

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Original Medicare costs

Let’s start with the costs for Parts A & B, as they’re the most straightforward.

Part A Costs

Premium

Most people don’t pay a monthly premium for Part A. However, if you’ve worked in the U.S. and paid taxes for less than 10 years, you may need to pay a premium for Part A coverage. In 2018, that amount could be as high as $422/month. 

Deductibles and cost sharing

You’ll pay full price for care up to a $1,340 deductible for each benefit period. A benefit period is the time you’re in a hospital or nursing facility, plus the 60 days that immediately follow your stay. It’s important to note that you can have multiple benefit periods within a year. This means you would be responsible for meeting the deductible in each of those periods.

Once you’ve reached your deductible, your costs are determined by the number of days you’re in the hospital or facility. After you’ve reached your deductible, you pay $0 per day for each hospital stay under 60 days. For each hospital stay that lasts 61-90 days, you’ll pay $329 per day. And for hospital stays over 90 days, you’ll pay $658 per day. Note that after 90 days, you will be using “lifetime reserve” days. All Medicare recipients are granted 60 of those days in their lifetime. Once you’ve used all of those, you’re responsible for all costs incurred during subsequent hospital stays.

 


Part B Costs

Premium

The standard Part B premium amount for 2017 is $134, although it can be higher if your income is over $85,000. It is also worth noting that, because your premium is calculated from the previous year’s tax return, if you’ve retired or gone through another major life change, you may be eligible to have the high income surcharge waived.

Deductibles and cost sharing

The deductible for Part B in 2018 is $183. After your deductible is met, you typically pay 20% of the Medicare rate for most doctor services, outpatient therapy, and durable medical equipment, like wheelchairs and walkers. It’s important to note that while Part A covers inpatient hospital and nursing facility stays, while Part B covers most doctor-provided services that you receive during your hospital stay, such as medical and surgical services.

Don’t forget that if you enroll late, you could have to pay penalties for as long as you keep Medicare.

Supplemental Coverage

As we discuss in this article, Medicare supplement plan benefits are standardized by the government, but the prices for the plans can vary by insurance company. The premiums range from as low as $60 to as high as several hundred dollars a month, depending on several factors, including the coverage the plan type provides, your gender, smoking status, and your plan’s coverage area. Keep in mind that if you choose a supplement plan, it will not include a prescription drug plan, and you will not receive vision or dental benefits, so there will be additional costs associated with that coverage.

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