The full cost of Medicare is dependent on several factors, which means that each Medicare beneficiary can pay different amounts. Medicare costs generally increase each year.
Medicare beneficiaries enjoy 80% coverage on approved services after they have met their Part A and Part B deductibles. In 2024, the Part A deductible is $1,632 and the Part B deductible is $240. We’ll discuss the monthly premiums for each in the next few sections.
Costs associated with Medicare Part A include the premium, deductible, coinsurance, and copayments.
Many Medicare beneficiaries enjoy premium-free Part A. As long as an individual has worked and paid Medicare taxes for a total of ten years, there is no premium for Part A. A married individual who has not paid Medicare taxes for ten years could also qualify for premium-free Part A if their spouse has met that requirement.
Individuals who do not meet that requirement could pay up to $506 each month for Part A. If a person has paid Medicare taxes for at least 30 quarters, the premium is $274 each month.
The current deductible for Medicare Part A is $1,632. This deductible works differently than most beneficiaries are accustomed to. Instead of this being an annual deductible, it applies to each benefit period.
A benefit period begins when a patient is admitted to the hospital and ends when that patient has remained out of the hospital for 60 days. If they are admitted again, the deductible is reset and must be met before any benefits are considered.
Part A copayments are applied when an individual has been in the hospital for more than 60 days or in a skilled nursing facility for more than 20 days during a benefit period.
The copayment amount will depend on how long the individual has been an inpatient in one of the two facilities. After 100 days, the Part A benefits have been exhausted and the member will pay for all expenses out-of-pocket.
Costs associated with Medicare Part B include the premium, deductible, coinsurance, and copayments.
The standard Part B premium is currently $174.70. Beneficiaries in a higher income bracket will pay an additional fee called the income-related monthly adjustment amount (IRMAA). The Social Security Administration uses the beneficiary’s tax return from 2 years prior to calculate the premium.
Generally, the Part B premium is deducted from the individual’s Social Security check.
The current deductible for Medicare Part B is $240. Extra Help is a program for eligible individuals that can assist with Part B deductibles and coinsurance costs.
The Part B deductible must be met before Medicare will pay for outpatient covered services. It does not apply for preventive care.
As we mentioned earlier, beneficiaries with higher incomes may pay a higher premium for Part B. However, if placed in that category, individuals can appeal the charges to have their premium reduced to the standard amount. This is common practice and the appeal may be granted in several instances.
While the cost for Original Medicare is similar for all beneficiaries, the costs of a Part C plan will vary. The total cost for Medicare Part C is based on monthly premiums, deductibles, coinsurance, and copayments.
Since Part D plans are offered by private insurance carriers, there is no one standard premium. The premium will depend on the plan’s carrier and coverage.
Like Part B premiums, Part D premiums are increased if the member is a high-income earner. Single people earning over $87,000 or married people making over $174,000 will have their premiums increased.
If Part D enrollment was delayed without other creditable prescription coverage, a penalty will also be added to the premium. The penalty is calculated by multiplying 1% by the national base beneficiary premium, which is currently $31.50. That number is then multiplied by the number of months the individual went without Part D coverage. This penalty remains in effect as long as the Part D plan is in effect.
The maximum deductible any Part D plan can have is $480. The deductible may not apply to all medications. If it does apply, the member will pay the full amount for the prescription until the deductible has been met. After that, the member will pay only the copay or coinsurance amount, which is based on which tier the drug is categorized in.
Your Part B premium will be deducted from your Social Security benefits. The standard deduction is $164.90. You may choose to have payment for other parts of Medicare also deducted from your Social Security check.
65-year old person who receive premium-free Part A and the standard premium for Part B will pay $164.90 for Original Medicare. This does not include a Medicare Advantage plan, a Medicare supplement plan, or a Part D plan. Individuals who are under 65 and enroll in Medicare due to disability pay the same amount for Original Medicare.
