What Does Medicare Cost?
Cost of Medicare
Medicare costs have risen in recent years with the increase in the number of retirees in America.
In 2020, Medicare costs can be broken down as follows:
Those who paid Medicare taxes for 30 to 39 quarters will pay a monthly premium of $252.
Those who fail to buy Part A when they’re initially eligible may have to pay up to 10% more for twice the number of years that they were eligible and failed to buy it.
If you have original Medicare, home health care services are free, but you’ll have to pay 20% of the Medicare approved amount for Durable Medical Equipment.
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Medicare Part A
The Part A hospital inpatient deductible and coinsurance will run each participant a deductible of $1408 for each inpatient period.
- Days 1-60: $0 coinsurance for each benefit period
- Days 61-90: $352 coinsurance per day of each benefit period
- Days 91 and beyond: $704 coinsurance each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
- Beyond lifetime reserve days: all costs
Skilled nursing facility costs:
- Days 1-20: $0 for each benefit period
- Days 21-100: $176 coinsurance per day of each benefit period
- Days 101 and beyond: all costs
Medicare Part B
The standard minimum monthly Medicare Part B Premium is $144.60 (or more depending upon your level of income).
Premiums can run up to $491.60 per month for single participants who had adjusted gross incomes of $500,000 or above or married filing jointly incomes of $750,000 or above.
The standard deductible for Medicare costs is $198 for 2020.
Once you meet your deductible for the year, you’ll generally pay 20% of the Medicare approved costs for doctor’s services (including when you’re in the hospital), durable medical equipment and outpatient therapy.
Medicare approved clinical lab services are free.
Outpatient healthcare services usually cost 20% of the Medicare approved amount.
Medicare Part C
Medicare Part C premiums, deductibles, copayments and coinsurance vary by plan.
You can shop these plans by cost and then contact the plans that you like in order to get more information.
Medicare prescription drug plan premiums also vary by plan and increase with the participant’s income.
The plan premiums range from just a few dollars a month up to $76.40 per month plus the plan premium for single participants with incomes of $500,000 or more or married filing jointly participants with incomes of $750,000 or more.
Medicare Cost Throughout the Years
It should be noted that while Medicare costs are increasing overall, an interesting counter-trend has emerged.
The cost per person of insuring someone through Medicare has actually decreased in recent years.
This is due at least in part to the fact that Medicare beneficiaries are getting younger.
A 2015 Congressional Budget Office study showed that we spend 73% more on an enrollee in the 75 to 84 bracket than we do on those in the 65 to 74 bracket.
What Does Medicare Cost FAQs
About the Author
True Tamplin, BSc, CEPF®
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.