Costs of Medicare
Medicare costs include monthly premiums, copayments, coinsurance, and deductibles.
Medicare Part A
Many people receive Part A without having to pay premiums. These people include:
- People 65 or older who already receive retirement benefits from Social Security or the Railroad Retirement Board
- People 65 or older who are eligible for benefits from Social Security or the Railroad Retirement Board who have not yet filed for them
- People 65 or older who had Medicare-covered government employment
- People 65 or older who or whose spouse worked and paid taxes to Social Security for at least 10 years (40 calendar quarters)
- People under 65 who have received disability benefits for 24 months or more
- People under 65 with End-Stage Renal Disease who meet certain requirements
For those who need to pay for Part A, premiums for 2021 have a wide range. People who have worked (or whose spouse has worked) between 30 and 39 calendar quarters while paying taxes to Social Security pay $259 per month in 2021. Those who have worked or whose spouse has worked fewer than 30 calendar quarters paying taxes to Social Security owe $471 each month in 2021.
The Part A deductible in 2021 is $1,484 for each benefit period. A benefit period begins when you are admitted as an inpatient in a hospital or skilled nursing facility and ends after you have not received inpatient care for 60 days.
Under Part A, you owe a daily coinsurance after a certain number of days have passed during a single benefit period while you are an inpatient. As a hospital inpatient, in 2021 you owe $371 each day for days 61 to 90 and $742 each day for days beyond 90. You have 60 lifetime reserve days during which this rate applies, and after you have used these 60 days you owe all costs. As an inpatient in a skilled nursing facility, you owe $185.50 each day from days 21 to 100. After day 100, you owe all costs.
Medicare Part B
Every Medicare beneficiary pays premiums for Part B. The 2021 Part B premium is $148.50. If you earned more in 2019 than $88,000 as an individual or more than $176,000 as a married couple, you will owe Medicare more. This is charged as an Income Related Monthly Adjustment Amount (IRMAA). For example, individuals who made between $88,000 and $111,000 in 2019 or married couples who made between $176,000 and $222,000 will pay $207.90 in Part B premiums each month.
If you do not sign up during your initial enrollment period or during your special enrollment period, you may owe a late enrollment penalty. This penalty will increase your premiums by 10% for each 12-month period you failed to sign up for Part B once you became eligible.
The deductible for Part B in 2021 is $203. Once you pay this deductible, you will pay 20% of the Medicare-approved amount for covered services as coinsurance.
Medicare Part D
Premiums for Part D are based on your income. Individuals who made less than $88,000 in 2019 and married couples who made less than $176,000 will pay only their plan premium. People who make more than these amounts will owe Medicare an Income Related Monthly Adjustment Amount (IRMAA) which they pay directly to Medicare, not to their plan.
Copayments for prescriptions will vary based on whether the drug is preferred or nonpreferred and whether it is generic, brand-name, or specialty.
To learn more about Medicare and paying for your healthcare, speak with your Virginia Medicare experts today.