Medicare Costs: Unpacking A, B, C, and D

Anytime you pack for a trip, you don’t want to forget your must-haves: a change of clothes, your passport, or your medications.

It’s the same with your Medicare options. As you consider plans, don’t forget one of the most important “must-haves” — total cost. That includes premiums, deductibles, out-of-pocket spending, and more.

Let’s unpack your Medicare options and take a closer look at costs for Parts A, B, C, and D.

First, a Few Definitions

• Premium: The amount your insurance plan costs.
• Deductible: The amount you pay for your health care before your insurance pays. For example, if you have a $2,000 deductible, you pay $2,000 before your insurance coverage kicks in.
• Coinsurance: The percent you pay for health services after you meet your deductible. Say your coinsurance is 20%. After you’ve paid your deductible, if you get a $100 bill from your doctor, you pay 20% or $20. Your insurance pays the rest.
• Benefit Period: For Medicare Part A, the benefit period begins at day one of a hospital or skilled nursing admission. It ends after you are out of the hospital or skilled nursing facility for 60 consecutive days.

Costs for Medicare Part A

Most people don’t pay a monthly premium for Medicare Part A — but only if they worked and paid for Medicare for 10 or more years. Their costs include:

Monthly premium — $0. But add $274 to your monthly premium if you paid Medicare taxes for 30 to 39 quarters (7.5 to 9.75 years). For less than 30 quarters or 7.5 years, add $499.

Hospital inpatient deductible — $1,556. The deductible applies every benefit period.

Coinsurance: Medicare covers up to 90 days of inpatient care every benefit period.

• Days 1 to 60: $0
• Days 61 to 90: $389 coinsurance each day
• Days 91 and beyond: $778 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
• Beyond lifetime reserve days: all costs

For example: You have a 120-day hospital stay; Medicare covered 90 days, and you used 30 lifetime reserve days. After you are out of the hospital for 60 days, you start another benefit period and are eligible for another 90 days of hospital coverage. But you then have only 30 lifetime reserve days remaining.

Costs for Medicare Part B

You’ll pay a late enrollment penalty every month if you sign up for Part B after you’re first eligible. That penalty could go up 10% for each 12-month period you could have had Part B.

Monthly premium — $170.10 is the 2022 standard cost. Monthly premiums can be higher depending on your income. But any penalties add more cost.

Annual deductible — $233

Coinsurance – 20% is what you typically pay of the Medicare-approved amount.

Costs for Medicare Part C

For Part C, or Medicare Advantage, costs vary depending on your plan.

Monthly premium — You must still pay your standard Medicare Part B premium. But many Medicare Advantage plans have a $0 premium. Some plans help pay your Part B premium.

Annual deductible, coinsurance/copays, and out-of-pocket costs — Visit MedicareSupportCenter.com or MyMedicare.gov. After entering your ZIP code, compare health plan costs in your area.

Costs for Medicare Part D

If you have Original Medicare, you may also want Medicare Part D to cover your prescription drug costs. Even if you don’t take prescription drugs now, you should consider getting Medicare drug coverage. Medicare drug coverage is optional and is offered to everyone with Medicare. If you decide not to get it when you’re first eligible, and you don’t have creditable prescription coverage (like drug coverage from an employer or union) or get Extra Help, you’ll likely pay a late enrollment penalty when you join a plan later. Generally, you’ll pay this penalty as long as you have Medicare drug coverage.

Monthly premium and annual deductible — Visit MedicareSupportCenter.com or MyMedicare.gov. After entering your ZIP code, add your prescription drugs. You can compare costs of monthly premiums and deductibles for prescriptions you use.

Do You Have Everything You Need?

In many ways, Medicare is the trip of a lifetime. Our licensed insurance agents are here with support and advice for all your must-haves. So, you get the right Medicare plan—at the right cost—for you.

MR544 8/2022