How Much Does Medicare Cost? | MedicareHealthPlans.com

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How Much is Medicare?

If you’re looking to enroll in Medicare, whether you’re newly eligible or switching from another plan, cost is probably one of your biggest concerns. It is made up of three parts: Part A (hospital insurance), Part B (medical insurance), and Part D (prescription drug insurance). Each part uses a different pricing scheme and has its own rules, which we’ve gathered here for your convenience. We’ll walk through each part and look at premiums, deductibles, and copays.

Part A

Inpatient hospital or mental health stay costs

Type of CostHow much you will pay in 2017
Coinsurance for first 20 days$0 per day
Coinsurance for days 21 through 100$164.50 per day of benefit period
Service costs after day 100All costs

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Skilled nursing facility stay (after a qualifying inpatient hospital stay) costs

Type of CostHow much you will pay in 2017
Deductible$1,316 per benefit period
Coinsurance for first 60 days$0 per day
Coinsurance for days 61 through 90$329 per day of benefit period
Coinsurance for days 91 and beyond$658 per lifetime reserve day* beyond the first 90 days (with a limit of 60 days total over your lifetime)
Service costs after lifetime reserve daysAll costs

The premiums

If you or your spouse paid Medicare taxes while working, you most likely will not have to pay any premiums for Part A. This is known as “premium-free Part A.”

If you need to buy Part A, the premium is based on the same credit system used for Social Security. You earn credits when you earn a certain amount of taxable income in a year. You can earn up to 4 credits per year, so they are sometimes called “quarters.” If you earned fewer than 30 credits, your 2017 premium will be $413. If you earned 30 to 39 credits, the premium will be $227. At 40 credits—that’s the equivalent of 10 years of work—you’re fully qualified for premium-free Part A.

Deductible and coinsurance

There is a $1,316 deductible for each benefit period for inpatient stays in mental health facilities and hospitals in 2017. The coinsurance is $0 for the first 60 days of benefits. After 60 days, coinsurance payments rise to $329 and then increase again after day 90.

For stays in skilled nursing facilities, you will be responsible for a $164.50 coinsurance for days 21 through 100, and all costs beyond day 100. You may also have to pay some small copayment or coinsurance amounts for supplies related to home health care and hospice.

Part B costs

Premiums

Part B is a little trickier. Unlike Part A, many people pay a monthly premium for Part B. The premium is based on a standard amount that increases if your income passes certain thresholds. The standard premium for 2017 is $134 per month, but most people pay a little less than that due to cost-of-living increases in 2017 Social Security benefits. The following table breaks down the thresholds and how much your premium increases at each point:

Modified Adjusted Gross IncomeTotal Monthly Premium (2017)
Individual: $85,000 or less
Joint: $170,000 or less
Married, filed separately: $85,000 or less
$134
Individual: Above $85,000 up to $107,000
Joint: Above $170,000 up to $214,000
$187.50
Individual: Above $107,000 up to $160,000
Joint: Above $214,000 up to $320,000
$267.90
Individual: Above $160,000 up to $214,000
Joint: Above $320,000 up to $428,000
Married, filed separately: Above $85,000 up to $129,000
$348.30
Individual: Above $21,000
Joint: Above $428,000
Married, filed separately: Above $129,000
$428.60
Source — Medicare.gov

If you receive Social Security, Railroad Retirement Board, or Office of Personnel Management benefits, the premium is deducted from those payments automatically. If you don’t get any of these benefits, you’ll receive a bill instead.

Deductible and coinsurance

There is a deductible with Part B, but it’s only $183 per year. Once that deductible is met, you generally pay a 20% coinsurance—that is, 20% of the cost—for most medically necessary doctor services, outpatient therapy, and durable medical equipment. Medicare will cover the rest.

Part D costs

Part D costs may seem a bit more complicated. This is mainly because the plans are provided by private insurers and thus have different premiums, deductibles, and copayment or coinsurance amounts.

Premiums

The premiums for Part D are based on income, like Part B. Individuals or households that pass certain thresholds will have an extra fee tacked onto their premiums each month. You can also have your premium automatically deducted from your Social Security check each month. Unlike Part B, though, this is optional and you need to contact your Prescription Drug Plan provider to set it up.

Deductible, copayment, and coinsurance

Deductibles also vary between plans. To keep costs down, Medicare has imposed a maximum deductible of $400 for 2017 that no Medicare drug plans may exceed. Once you meet your deductible, your plan starts paying its portion of your drugs. Some plans don’t have a deductible at all. In this case, the plan pays its share all the time.

As you look at Part D plans, you may see the terms “copayment” and “coinsurance.” A copayment is a fixed dollar amount that you’ll pay (say, $10 for a generic prescription), whereas a coinsurance payment is a percentage, like the 20% of total costs you pay with Part B.

Still have questions on how much Medicare may cost you? Ready our guide to premiums and deductibles in 2017 here. 

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