THE COST OF MEDICARE

Listed below are the healthcareSupposebasic costs for people with Medicare. If you want to see and compare costs for specific health care plans. For specific cost information (like whether you've met your deductible, how much you'll pay for an item or service you got, or the status of a claim), visit My Medicare.gov. 

PART A PREMIUM

Most people don't pay a monthly premium for Part A (sometimes called "premium-free Part "). If you buy Part A, you'll pay up to $525 each month in 2024. If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $475. If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $264.
Part A hospital inpatient deductible and coinsurance You pay:

• $1,632 deductible for each benefit period.  A Part A Benefit Period consists of 90 days in length.  If you have Original Medicare or a Medicare Advantage plan you can expect to pay this.  However, this deductible is covered by most Medicare Supplement plans.
• Days 1-60: $0 coinsurance for each benefit period
• Days 61-90: $408 coinsurance per day of each benefit period
• Days 91-150 and $816 coinsurance per each "lifetime reserve day" after day 90 for each benefit period (up to 60 days over your lifetime)
• Beyond 151 days you pay 100% for 365 Days.

• Late enrollment penalty:
  • If you don't buy it when you're first eligible, your monthly premium may go up 10%. (You'll have to pay the higher premium twice the number of years you could have had Part A, but didn't sign up.)

 

Part A Costs If You Have Original Medicare

Note: All Medicare Advantage Plans must cover these services. If you're in a Medicare Advantage Plan, costs vary by plan and may be either higher or lower than those in Original Medicare. Review the "Evidence of Coverage" from your plan.

• Home Health Care 
  • $0 for home health care services.
  • 20% of the Medicare-approvedthat Medicare-approved amount for Durable Medical Equipment (DME).

• Hospice Care 
  • $0 for hospice care.
  • You may need to pay a co-payment of no more than $5 for each prescription drug and other similar products for pain relief and symptom control while you're at home. In the rare case your drug isn’t covered by the hospice benefit, your hospice provider should contact your Medicare drug plan to see if it's covered under your Part D (Medicare Prescription Drug Coverage).
  • You may need to pay 5% of the Medicare approved amount for inpatient respite care.
  • Medicare doesn't cover room and board when you get hospice care in your home or another facility where you live (like a nursing home).

• Hospital Inpatient Stay 
  • $1,632 deductible for each benefit period. If you have Original Medicare or a Medicare Advantage plan you can expect to pay this.  However, this deductible is covered by most Medicare Supplement plans.
  • Days 1–60: $0 co-insurance for each benefit period.
  • Days 61–90: $408 coinsurance per day of each benefit period.
  • Days 91-150: $816 coinsurance per day.
  • Day 151 and beyond you will pay 100% of the Costs for 365 Days.

• Note: You pay for private-duty nursing, a television, or a phone in your room. You pay for a private room unless it's medically necessary.

• Mental Health Inpatient Stay 
  • $1,600 deductible for each benefit period. If you have Original Medicare or a Medicare Advantage plan you can expect to pay this.  However, this deductible is covered by most Medicare Supplement plans.
  • Days 1–60: $0 co-insurance for each benefit period.
  • Days 61–90: $389 coinsurance per day of each benefit period.
  • 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.
  • 20% of the Medicare approved amount for mental health services you get from doctors and other providers while you're a hospital inpatient.

Note There's no limit to the number of benefit periods you can have when you get mental health care in a general hospital. You can also have multiple benefit periods when you get care in a psychiatric hospital. Remember, there's a lifetime limit of 190 days.

• Skilled nursing facility stay 
  • Days 1–20: $0 for each benefit period.  
  • Days 21–100: $204 co-insurance per day of each benefit period.
  • Days 101 and beyond: all costs.

 

PART B PREMIUM

The standard Part B premium amount is $174.60 for 2024.
The annual Part B deductible and coinsurance is $240 for 2022. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you're a hospital inpatient), outpatient therapy, and durable medical equipment (DME).
Medicare Part B (Medical Insurance)

• Monthly Premium: 

The standard Part B premium amount in 2023 was and $164.90, the projected cost for Part B premiums in 2024 is $174.60.  Everyone who has enrolled in Medicare Part B will have to pay this monthly premium and typically, it is deducted from your monthly Social Security Benefits.  

This monthly Medicare Part B premium is paid by everyone whether you are participating in Original Medicare (Medicare Part A and Part B), a Medicare Advantage (Medicare Part C Plan), or if you enroll in a Medicare Supplement or Medigap Plan.

Most people pay the standard Part B premium amount. If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you'll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.

• Late Enrollment Penalty: 

• In most cases, if you don't sign up for Part B when you're first eligible, you'll have to pay a late enrollment penalty. You'll have to pay this penalty for as long as you have Part B. Your monthly premium for Part B may go up 10% of the standard premium for each full 12-month period that you could have had Part B, but didn't sign up for it. Also, you may have to wait until the General Enrollment Period (from January 1 to March 31) to enroll in Part B. Coverage will start July 1 of that year.

Part B Costs If You Have Original Medicare

Note: All Medicare Advantage Plans must cover these services. If you're in a Medicare Advantage Plan, costs vary by plan and may be either higher or lower than those in Original Medicare. Review the "Evidence of Coverage" from your plan.

• Part B Annual Deductible:

• Most doctor services (including most doctor services while you're a hospital inpatient)
• Outpatient therapy
• Durable Medical Equipment aka DME.

• Clinical laboratory services:  

• You pay $0 for Medicare approved services.

• Home Health Services: 

• $0 for home health care services.
• 20% of the Medicare-approved amount for Durable Medical Equipment (DME). 

• Medical and Other Services:

• You pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you're a hospital inpatient), outpatient therapy, and Durable Medical Equipment (DME).  

• Outpatient Mental Health Services: 

• You pay nothing for your yearly depression screening if your doctor or healthcare provider accepts the  assignment.
• 20% of the  for visits to your doctor or other healthcare provider to diagnose or treat your condition. The Part B deductible applies.
• If you get your services in a hospital outpatient clinic or hospital outpatient department, you may have to pay an additional co-payment or coinsurance amount to the hospital.

• Partial Hospitalization Mental Health Services:

• You pay a percentage of the Medicare approved amount for each service you get from a doctor or certain other qualified mental health professionals if your health care professional accepts assignment. You also pay coinsurance for each day of partial hospitalization services provided in a hospital outpatient setting or community mental health center, and the Part B deductible applies.

• Outpatient Hospital Services: 

• You usually pay 20% of the Medicare approved amount for the doctor or other health care provider's services. For services that can also be provided in a doctor’s office, you may pay more for outpatient services you get in a hospital than you’ll pay for the same care in a doctor’s office. However, the hospital outpatient co-payment for the service is capped at the inpatient deductible amount.
• In addition to the amount you pay the doctor, you’ll also usually pay the hospital a co-payment for each service you get in a hospital outpatient setting, except for certain preventive services that don’t have a co-payment. In most cases, the co-payment can’t be more than the Part A hospital stay deductible for each service.
• The Part B deductible applies, except for certain preventative services. If you get hospital outpatient services in a critical access hospital, your micropayment may be higher and may exceed the Part A hospital stay deductible.

 

PART C PREMIUM 

Part C monthly premium varies by plan. 

MEDICARE SUPPLEMENT PLAN aka MEDIGAP PLANS

• Monthly Premium:

Each Plan Letter has the exact same coverage levels anywhere in the US but the premium varies by plan and by state..

• Medicare Supplement Policies have always been considered as the plans that offer the best coverage.  The plans have different levels of coverage and although they do not include any Prescription Drug Plans you can see any doctor, anywhere in the USA as long as they accept Medicare, and about 94% of physicians do accept Medicare. The most popular Medicare Supplements over the past 5 years have been Plan F, Plan G and Plan N.

 

MEDICARE PART C or MEDICARE ADVANTAGE

• Monthly Premium:

The Part C monthly premium varies by plan.

• Deductibles, Co-payments, & Coinsurance:

The amount you pay for Part C deductibles, co-payments, and/or coinsurance varies by plan. 

PART D PREMIUM 

The Part D monthly premium varies by plan (higher-income consumers may pay more). Compare costs for specific/individual Part D plans.   If you are taking little or no prescriptions, and you are looking for a stand-alone PDP, they can be found starting at around $15 per month.  And, you can change your Prescription Drug plan every year during the Fall Annual Enrollment Period (AEP), so there is really no reason to purchase a more expensive plan until your needs change.

Deductibles, Co-payments, & Coinsurance: DRUG COVERAGE)

• Monthly premium: The Part D monthly premium varies by plan (higher-income consumers may pay more).   If your annual income is less than $91,000 as an Individual or less than $182,000 if married and filing jointly you will only pay your plan premium.  If, however; your income is above these figures you will pay a monthly penalty that is in addition to your monthly Plan Premium.
• You or your Agent can refer to the exact cost from the www.medicare.gov website.
• Late enrollment penalty: 

You may owe a late enrollment penalty if, for any continuous period of 63 days or more after your Initial Enrollment Period is over, you go without one of these:

• A Medicare Prescription Drug Plan (Part D)
• A Medicare Advantage Plan (Part C) (like an HMO or PPO) or another Medicare health plan that offers Medicare prescription drug coverage
• Credible Prescription Drug Coverage

In general, you'll have to pay this penalty for as long as you have a Medicare drug plan. The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.

• Deductibles, Co-payments, & Coinsurance:

The amount you pay for Part D deductibles, co-payments, and/or coinsurance varies by plan. 

 

Figuring Your Total Cost For Healthcare

Cost For Medicare Part A (Usually $0) + Your Medicare Part B Premium which is $174.60 for 2024 + Your Annual Part B Deductible of $240 + Cost of your monthly Medicare Advantage or Medicare Supplement Premium ($90 - $130) and your Medicare Part D Monthly Premium ($35-$45 Average Cost in Arizona) = Your Monthly Cost for Healthcare. 

Every individual is different and has different needs and levels of protection that they believe suits them the best.  As strictly a ballpark guesstimate suita fair monthly budget for someone new to Medicare will be around $320 - $330 a month.  This figure includes your Monthly and Annual Medicare Part B premiums, a Medicare Supplement Plan N or G, and your monthly Medicare Part D (Prescription Drug Plan premium).  This figure does not take into account any medications you may be taking.

 

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One of the biggest questions new Medicare beneficiaries want to know is how much their Medicare is going to cost. That is a fair and reasonable question  and it depends on the choices they make for which type of Medicare coverage they believe fits their budget and their lifestyle the best. That is why we designed this Monthly Estimated Cost Worksheet for Medicare.

First of all, Medicare is not free.  There are costs associate with Medicare.  However, these costs are very reasonable compared to the way healthcare costs and Health insurance premiums have skyrocketed out of control since 2000.  Below are the Categories and what you should expect to pay for various Medicare plans.  

 

MEDICARE PART A PREMIUM

Medicare Part A is the portion of Medicare that pays for Hospitalization. This is what we have all paid in Medicare and Social Security taxes over our working career. Most people who have worked at lease 10 years full time will not pay this premium.  If you are a spouse who was a stay at home spouse and did not work enough to earn 40 creditable hours you may still be entitled to Part A at no cost because of your spouses work history.  If you have any question you can find the answers to most questions by setting up your Social Security Profile/Account at www.ssa.gov contact your local Social Security office.

 

MEDICARE PART A DEDUCTIBLE

Even though Medicare does not have deductibles like we have all been used to over the years, there is a Part A deductible that everyone new to Medicare needs to be aware of.  Anytime you are admitted to the Hospital and you stay overnight, there is a Medicare Part A Deductible of $1,484.  This deductible is good for 60 Days, if you are admitted to the hospital again after the 60 Day Period, you will be charged for another deductible. Even though $1,484 is very expensive, it is still a little bit less than the nightly average for a Hospital stay in the US. There is good news though if you choose a Medicare Supplement the majority of Medigap plans cover 100% of the Part A Deductible.  If you choose a Medicare Advantage Plan you will have a low to $0 premium each month, however, Medicare Advantage Plans will not pay for the Part A Deductible

 

MEDICARE PART B ANNUAL DEDUCTIBLE

The annual Part B Deductible is a charge that everyone must pay, regardless of the type of Plan they have.  If you enrolled in Medicare Part B, you will have an Annual Deductible that is just $233 for 2022.  That means that the first $233 you have each Plan Year for covered healthcare expenses you will pay out of pocket.  This can include Part A, Part B, Part C or Part D.  After you have met the $233 Deductible, Medicare will begin paying their 80% share for covered Services (Medicare Part A & Medicare Part B), as will your Medicare Part D Prescription plan. 

 

MEDICARE PART B MONTHLY PREMIUM

Medicare Part B is the part of Medicare that covers your Doctors Bills, Office Visits, Lab Work, Diagnostics such as X-Ray's MRI, CT Scans, etc. For 2022 the Monthly Part B deductible is $170.10.  EVERYONE who is enrolled in Medicare has to pay this amount, unfortunately it is non-negotiable. It does not matter if you have Original Medicare (Medicare Part A and Part B), A Medicare Advantage Plan (Medicare Part C) or Original Medicare with a Medigap (Medicare Supplement) plan.  Most people have this charge automatically deducted from their monthly Social Security check.  If you defer receiving your Social Security Benefits for a few years, you can set this up as an automatic charge to your Checking or Savings Account, a monthly charge to a Credit Card, or you can be billed directly by Medicare each quarter.

 

MEDICARE PART B ADDITIONAL CHARGE

Most people will not pay any additional charges for their Monthly Medicare Part B Deductible.  But, if you are a high wage earner, you may be subject to paying an additional Part B charge.  This is based on your Income and salary.  Social Security and Medicare have access to your IRS Tax Records.  You will be notified by Medicare and Social Security if you are facing any of these additional charges.

 

MEDIGAP PLAN G MONTHLY PREMIUM

In this section I show the charge for Medicare Supplement/Medigap Plan G as it is the most comprehensive and has the highest monthly premium for Medicare Supplements. If you did not choose to have a Medicare Supplement, you should use this section for your Medicare Advantage Monthly Premium if you have one. In Arizona a new male Medicare beneficiary will pay $120 - $125 for a Plan G and a new female Medicare beneficiary will pay $95 - $110 each month for a Plan G.

 

MEDICARE PART D MONTHLY PREMIUM

Medicare Part D is the part of Medicare that covers prescription medications.  The lowest cost monthly premium in Arizona is $7.50 per month and the high end is $105 per month.  These are just the Part D Monthly Premiums and do not include the cost of any medications.  I used an average of $30 for the purposes of creating the worksheet.  Once you have decided on a Part D Plan you can use the exact cost figures.

 

THE BOTTOM LINE IF YOU CHOOSE A MEDICARE ADVANTAGE PLAN (PART C)

You will spend most likely spend $170.10 per month as long as your plan has a Prescription Drug Plan included with it. However, you will be responsible for any/all office co-pays and you will pay your 20% for all Medicare approved charges throughout the year.  All Medicare Advantage Plans have include MOOP (Maximum Out-of-Pocket) expenses.  This will vary from $3,000 - $8,500 annually depending on your plan.  And, you will have to use your plans network of Doctors and Hospitals whenever you need treatment or services.

 

THE BOTTOM LINE IF YOU CHOOSE A MEDICARE SUPPLEMENT PLAN

Most new Medicare Beneficiaries will pay around $300 per month for a Medicare Supplement Plan G to go with Original Medicare and a Medicare Part D Prescription Drug plan.  Plan G is the best and most comprehensive Medigap plan available.  With a Plan G Medicare Supplement, they will cover the 20% of all costs you are responsible for.  There are no Co-pays, no out-of-pocket expenses aside from any prescription medications. You can see any doctor and use any hospital in the United States.  There are no MOOP expenses.  Basically, your MOOP is the total cost of your monthly premiums which will be around $1,600 per year.