Many people are surprised to learn that Medicare is not free. For people on fixed incomes, the monthly expenses paid toward Medicare can make an impact on their budget. Just as in your previous healthcare, Medicare involves copayments, coinsurance, deductibles, and premiums. Every year, these prices go up slightly to account for inflation and rising costs.
Original Medicare includes Part A and Part B, which are your hospital and medical insurance. The costs of each are outlined below.
If you need help affording your out-of-pocket costs for Medicare, you can apply for a Medicare Savings Program or add a Medicare Supplement.
Part A
Part A coverage includes hospital inpatient care, skilled nursing facility care, nursing home care (not custodial or long-term), hospice care, and home health care.
A great many people qualify for premium-free Part A. If you are not eligible for premium-free, you can still buy Part A if you are eligible for Medicare benefits. The monthly premium for people who have worked or whose spouse has worked between 30 and 39 calendar quarters in a job that paid Social Security taxes in the U.S. is $259 each month. Those who worked fewer than 30 quarters in a job that paid taxes to Social Security will pay $471 each month for Part A.
The deductible for Part A works differently than with most health insurance. Each stay in a hospital or skilled nursing facility is defined as a benefit period. A benefit period begins when you are admitted as an inpatient. It ends when you have not received inpatient care for 60 days. The Part A deductible for 2021 is $1,484 for each benefit period.
As part of cost-sharing, you will owe coinsurance after staying a certain length of time as an inpatient. When you are an inpatient in the hospital, you owe nothing in coinsurance for the first 60 days of each benefit period. Days 61 to 90 you will owe $371 each day, and each day past day 90 you owe $742. This is until you use up your 60 lifetime reserve days, after which you owe all costs.
When you are an inpatient in a skilled nursing facility, you pay nothing in coinsurance for the first 20 days. Days 21 to 100 of each benefit period, you will owe $185.50 in coinsurance per day. Beyond 100 days, you owe all costs.
The penalty for late enrollment in Part A adds up to 10 percent to your monthly premium for every 12 months you went without enrolling once you became eligible.
Part B
All Medicare beneficiaries pay premiums for Part B. The standard Part B premium is $148.50 for those filing an individual income less than $88,000 or filing jointly with an income less than $176,000. Those with higher incomes will be charged an Income Related Monthly Adjustment Amount (IRMAA) which increases the cost of monthly premiums for each income bracket above $88,000.
The Part B deductible is $203 for 2021. This is a yearly deductible, unlike Part A. After you have paid the deductible, you will pay 20 percent of the Medicare-approved amount for most doctor services as coinsurance.
For more information on the costs of Medicare, give us a call today.