There’s no such thing as a free lunch, and unfortunately, that holds true for Medicare, too!
Even though you’ve probably paid Medicare taxes for many years, there are still costs involved with Medicare insurance.
Costs of Medicare Part A
Medicare Part A is $0 premium for most people. Essentially, this is the “free” part of Medicare – the part you’ve been paying into for so long.
While there’s no premium for about 99% of Medicare enrollees, there is a deductible along with coinsurance. These tend to go up a little bit each year.
Here are the 2021 Medicare Part costs:
- $1,484 deductible
- Days 1-60: $0 coinsurance
- Days 61-90: $371 coinsurance
- Days 91+ $742 coinsurance per “lifetime reserve day,” which caps at 60 days
- Skilled Nursing Facility coinsurance: $185.50
- Beyond lifetime reserve days: You pay all costs
The hospital coinsurance is paid per benefit period and is based on the length of your hospital stay.
Costs of Medicare Part B
All Medicare beneficiaries pay a monthly Part B premium, and the cost of it is based on your income.
Most people in 2021 will pay $148.50 per month for their Part B premium, as most people have incomes under $88,000 (individual tax return) and $176,000 (joint tax return). However, the more you make, the more you pay.
Here are the 2021 Income-Related Monthly Adjustment Amount (IRMAA) charts:
|Beneficiaries who file individual tax returns with income:||Beneficiaries who file joint tax returns with income:||Income-related monthly adjustment amount||Total monthly premium amount|
|Less than or equal to $88,000||Less than or equal to $176,000||$0.00||$148.50|
|Greater than $88,000 and less than or equal to $111,000||Greater than $176,000 and less than or equal to $222,000||$59.40||$207.90|
|Greater than $111,000 and less than or equal to $138,000||Greater than $222,000 and less than or equal to $276,000||$148.50||$297.00|
|Greater than $138,000 and less than or equal to $165,000||Greater than $276,000 and less than or equal to $330,000||$237.60||$386.10|
|Greater than $165,000 and less than $500,000||Greater than $330,000 and less than $750,000||$326.70||$475.20|
|Greater than or equal to $500,000||Greater than or equal to $750,000||$356.40||$475.20|
|Beneficiaries who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses:||Income-related monthly adjustment amount||Total monthly premium amount|
|Less than or equal to $88,000||$0.00||$148.50|
|Greater than $88,000 and less than $412,000||$326.70||$475.20|
|Greater than or equal to $412,000||$356.40||$504.980|
The annual deductible for Part B in 2021 is $203 per year. After your deductible is met, you typically pay 20% coinsurance on all Medicare-approved services and items.
Costs of Medicare Part D
Medicare Part D costs vary from plan to plan. An average premium for a Part D plan is around $41 per month.
There are other costs like a deductible and copays, but that varies quite a bit depending on which plan you choose.
We can help you navigate this process, so please contact us for assistance! This is and always will be a free service.
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