Cost of Medicare
Medicare costs are based on multiple factors, including federal decisions, location, and personal factors. Here’s an overview to give you a better idea of what to expect.
How Medicare Costs Work
There are three categories of Medicare costs that your payments will fall into — premiums, deductibles, and out-of-pocket expenses.
Premium
When you inquire about the costs of a Medicare plan, you’re likely asking for the plan’s premium. Premiums are a once-a-month fee you must pay in order to receive coverage. If you miss more than 3 months of payment, your coverage will likely be terminated.
Deductible
The other consistent and recurring cost for Medicare plans is the deductible. You will encounter this fee when you use your plan’s benefits for the first time that year — so, if you don’t go to the hospital until November, you won’t pay your Part A deductible until November. Or, if you don’t go to the hospital at all for the year, you won’t pay your deductible at all. It then resets for the following year.
Out-of-Pocket Costs
The final cost category is not consistent or recurring like the first two. Out-of-pocket expenses are charged based on the care you receive, who you receive it from, and where you receive it.
There are two types of out-of-pocket costs: coinsurance and copayments. Coinsurance payments are a percentage — so, for instance, your Medicare plan may ask you to cover 20% of your hospital bill, while they cover the remaining 80%. A copayment, on the other hand, is a flat fee. So, if you get a prescription through your Part D plan, they may charge you a copayment fee of $1 to $3.
Medicare Costs Explained
Now you know the terms, but how do they fit into your Medicare plans? Original Medicare (Parts A and B) has set premiums and deductibles. How much you pay is based on your income, but most beneficiaries pay the same amount.
The standard Part B premium for 2022 is $170.10. If you file your individual tax return for more than $91,000 or a joint return for more than $182,000, this premium increases up to $578.30. These numbers will continue to change every year, so be sure to check back and prepare accordingly.
The 2022 Part B deductible is $233 per year. For Part A, it’s currently $1,556 per benefit period. Deductibles do not change based on income.
The costs for other Medicare plans, like Medicare Advantage, Part D, or Medicare Supplement, unlike Original Medicare, will vary. But the same income-premium factor for Part B applies to Part D.
Premium-Free Part A
Why haven’t we mentioned a Part A premium? Because very few people actually have to pay it. As long as you have worked and paid Social Security income taxes for at least 10 years, you qualify for premium-free Part A.
Understand Your Medicare Costs
It’s easier to navigate Medicare with someone who makes your health coverage their priority. Call Priority Health Insurance Services at 626-966-1098 or email info@priorityhealthins.com.
