As you approach your golden years, one of the most important changes you’re likely to experience is in your healthcare coverage as you move from an employer’s healthcare plan to Medicare. Once you know whether you’re eligible for Medicare, and how to apply for Medicare, your next question is likely, “How much does Medicare cost?”
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Medicare Part A costs:
You are not required to pay for Medicare Part A if you (or your spouse) have worked for 10 years paying payroll taxes. Most Medicare recipients meet this qualifying work criteria and will not need to pay for Medicare Part A.
| Monthly premium |
| Cost With Qualifying Work History | $0 |
| Cost Without Qualifying Work History | Up to $458 per month |
The number of years you or your spouse worked while paying Medicare taxes will be taken into account to determine how much you have to pay to receive Medicare Part A, with $458 per month as a maximum.If your (or your spouse’s) work record does not qualify you for free benefits, you still have access to full Medicare benefits, but you must pay to participate in the program.
If you aren’t sure whether your work record has qualified you to receive free benefits, contact the Social Security Administration. Social Security can tell you how long you would need to continue working to receive free benefits and what your monthly premiums would be with your current work record.
As you weigh the costs and benefits, keep in mind that if you are not eligible for free Medicare Part A and you don’t buy it when you’re first eligible, your monthly premium may increase by 10%. Medicare then requires that you pay the higher premium for twice the number of years you could have had Part A but didn’t sign up.
If your (or your spouse’s) work record does not qualify you for free benefits, you still have access to full Medicare benefits, but you must pay to participate in the program.
For hospital inpatient care, you will pay a yearly deductible of $1,408. For hospital stays more than 60 days, you will be required to share more of the cost as the hospital stay goes on. This is called coinsurance.
Deductible $1408
PLUS
| Hospital stay | Cost |
| Inpatient Hospital Stay: Days 1–60 | $0 |
| Inpatient Hospital Stay: Days 61–90 | $352 per day |
| Inpatient Hospital Stay: Day 91 And Beyond | $704 per lifetime reserve day (max 60 in lifetime) |
| Inpatient Hospital Stay After 90 Days And After Lifetime Reserve Days | You pay all costs |
After 90 days of a hospital stay, Medicare will pay for more days, but those days beyond your 90-day stay are called “lifetime reserve days.” You get 60 lifetime reserve days during your lifetime, and once you have used them you are responsible for the total cost of hospitalization beyond 90 days.
While this is not an exhaustive list, Medicare Part B covers:
Unlike Medicare Part A, you are required to pay a monthly premium for Medicare Part B. Most people will pay the standard monthly premium amount, but your premium could be higher if you earn more than $87,000 annually as an individual or $174,000 as a household.
Most people will pay the standard monthly Medicare Part B premium amount, but your premium could be higher if you earn more than $87,000 annually as an individual or $174,000 as a household.
If you earn benefits from one of the following entities, your Medicare Part B monthly premium is automatically deducted from your benefits:
Everyone else will receive a bill for the following according to their income:
| File individual tax return | File joint tax return | File married and separate tax return | Monthly premium |
| $87,000 Or Less | $174,000 or less | $87,000 or less | $144.60 (standard premium) |
| Above $87,000 Up To $109,000 | Above $174,000 up to $218,000 | Not applicable | $202.40 |
| Above $109,000 Up To $136,000 | Above $218,000 up to $272,000 | Not applicable | $289.20 |
| Above $136,000 Up To $163,000 | Above $272,000 up to $326,000 | Not applicable | $376.00 |
| Above $163,000 And Less Than $500,000 | Above $326,000 and less than $750,000 | Above $87,000 and less than $413,000 | $462.70 |
| $500,000 Or Above | $750,000 and above | $413,000 and above | $491.60 |
Your Medicare Part B deductible for 2020 is $198. After you meet your deductible for the year, you will be responsible for 20% of the Medicare-approved cost of covered services, known as coinsurance as stated above. Medicare pays 80% for most services covered under Part B.
Medicare Part C is also known as Medicare Advantage. A Medicare Advantage plan is an alternative way of getting your Medicare benefits. These are healthcare plans that are offered by Medicare-approved private companies, and they take the place of Medicare A and B if you choose to enroll in one of them.
Each Medicare Advantage plan cost will vary based on the plan you choose. To compare costs and find the right Medicare Advantage plan, speak to a licensed healthcare professional.
Just like Medicare Part B, you must pay a monthly premium for Medicare Part D plans, and the cost varies based on income. Your plan premium will be a set monthly amount depending on which Part D plan you choose, then higher income households will pay more on top of that according to their income bracket.
Each Medicare Advantage plan cost will vary based on the plan you choose.
| Individual tax return yearly income | Joint tax return yearly income | File married and separate tax return | Monthly premium |
| $87,000 Or Less | $174,000 or less | $87,000 or less | Your plan premium |
| Above $87,000 Up To $109,000 | Above $174,000 up to $218,000 | Not applicable | $12.20 + your plan premium |
| Above $109,000 Up To $136,000 | Above $218,000 up to $272,000 | Not applicable | $31.50 + your plan premium |
| Above $136,000 Up To $163,000 | Above $272,000 up to $326,000 | Not applicable | $50.70 + your plan premium |
| Above $163,000 And Less Than $500,000 | Above $326,000 and less than $750,000 | Above $87,000 and less than $413,000 | $70.00 + your plan premium |
| $500,000 Or Above | $750,000 and above | $413,000 and above | $76.40 + your plan premium |
You may incur a late enrollment penalty if you miss your initial eligibility window and you go 63 or more continuous days without either a Medicare Part D plan, a Medicare Advantage plan (Part C) or other approved prescription drug coverage.
If you incur a late enrollment penalty, the amount you have to pay will vary based on how long you were without coverage, and you will likely need to pay these inflated premiums for the duration of your Medicare Part D coverage.
The amount you will be required to pay for deductibles, coinsurance and copayments will vary depending on the Part D plan you choose. Weigh these items carefully prior to signing up for a Part D plan.
After careful consideration of the costs associated with each portion of Medicare, speak to a Medicare expert to get the coverage you need. A licensed healthcare agent can help empower you during the enrollment process and lead you in the right direction as you make the best decision for your health and wallet.
