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It can seem complicated, but SelectQuote makes understanding Medicare simple. We can help you navigate the coverage you need and find a price that fits your budget. There’s no obligation to enroll.

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How much does Medicare cost?

Discussing Medicare costs can be somewhat complicated because “Medicare” is not a single product—it’s made up of different parts and options and each has its own cost attached. Common Medicare costs include premiums, copayments, coinsurance, deductibles and out-of-pocket limits. Each Medicare plan may have different costs associated with it.

We can help you navigate your Medicare options and figure out what coverage is best for your situation. There’s no obligation to enroll.

Your Medicare Options and Their Cost

Let’s begin by looking at the various options you have for Medicare coverage:

Original Medicare

(also known as Medicare Part A and Medicare Part B) provides standardized basic coverage for eligible Americans age 65 and older, with some exceptions for those younger than 65. Medicare Part D (also known as prescription coverage) is provided and paid for separately.

Medicare Supplement Insurance Plan

(also known as Medigap) supplements Medicare Part A and Part B. It helps to pay for some of the health care costs not covered by Original Medicare such as copayments, coinsurance and deductibles.

Medicare Advantage

(also known as Medicare Part C) includes the coverage of Part A, Part B and typically also includes Part D, Medicare Prescription Drug plans, plus additional benefits not available with Original Medicare.

What are the costs of Medicare Part A?

Keep in mind that if you don’t enroll in Medicare Part A when you’re first eligible, your monthly premium could go up 10%. You’ll have to pay the higher premium for twice the number of years you could have had Part A.

Free Premium

Most people are eligible to pay no premium for Part A.

Paid Premium

If you aren’t eligible for premium-free Part A, you will pay as follows during 2020:

  • $458/month if you paid Medicare taxes for less than 30 quarters (less than 7.5 years)
  • $252/month if you paid Medicare taxes for 30-39 quarters (7.5 years-9.75 years)

Other Coverage and Costs:

  • $0 for home health care services
  • 20% of the Medicare-approved amount for durable medical equipment
  • $0 for hospice care (you may have a copay of no more than $5 for each prescription drug and similar products for pain relief and symptom control while you’re at home*)
  • Outpatient Mental Health Services: You pay nothing for your yearly depression screening if your doctor or health care provider accepts assignment
  • Outpatient Mental Health Doctor Visits: 20% of the Medicare-approved amount for visits to your doctor or other health care provider to diagnose or treat your condition. The Part B deductible applies.
  • Outpatient Mental Health Clinics: If you get your services in a hospital outpatient clinic or hospital outpatient department, you may have to pay an additional copayment 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.

Hospital Coverage Deductibles (In-patient, skilled nursing, hospice) for the year 2020 are as follows:

  • $1,408 for each benefit period
  • Days 1-60: $0 coinsurance for each benefit period
  • Days 61-90: $352 coinsurance per day for each benefit period
  • Days 91 and Beyond: $704 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
  • Extras: 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 Stays: There is 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.

What are the costs of Medicare Part B?

  • Monthly Premiums: Everyone pays at least the standard monthly premium of $144.60 (in 2020), but some people may pay higher amounts for Medicare Part B. If your modified adjusted gross income as reported on your IRS tax return from two 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 and in 2020, the amounts range from $202.40 to $491.60 per month.
  • Medical Deductibles and Coinsurance: These are capped at $198 per year (as of 2020). After the deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services, including while you’re an in-patient, receiving outpatient therapy and for durable medical equipment like a wheelchair or walker.
  • Other Coverage and Costs:
    • Clinical Laboratory Services: You pay $0 for Medicare-approved services.
    • Home Health Services: $0 for home health care services.
    • 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 copayment 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 copay for each service you receive in a hospital outpatient setting, except for certain preventive services. In most cases, the copay can’t be more than the Part A hospital stay deductible for each service.

The Part B deductible applies, except for certain preventive services. If you get hospital outpatient services in a critical access hospital, your copayment may be higher and may exceed the Part A hospital stay deductible.

Keep in mind that 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 could go up 10% of the standard premium for each full 12-month period you could have had Part B but didn’t. Also, you may have to wait until the General Enrollment Period (January 1-March 31) to enroll in Part B. Coverage will start July 1 of that year.

How much does a Medicare Part C plan cost?

A Medicare Part C plan—also called Medicare Advantage—takes the place of Parts A, B, and often, D. The premiums for Part C vary by plan and by the private insurer purchased from. Not all plans are available in all states.

All Medicare Advantage plans must cover Part A and Part B services. Some also cover Part D and include additional benefits such as vision, hearing and dental.

What are the costs associated with a Part D plan?

If you’re enrolled in a stand-alone Medicare Part D Prescription Drug plan, you might pay a monthly plan premium (besides your Medicare Part B premium). Your premium is based on your income, your marital status and whether you file individually or jointly.

  • Deductibles, Copayments & Coinsurance: The amount you pay for Part D deductibles, copayments and/or coinsurance varies by plan. Deductibles vary between Medicare drug plans, but no Medicare drug plan may have a deductible more than $435 in 2020. Some Medicare drug plans don’t have a deductible.
  • 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) or another Medicare health plan that offers Medicare prescription drug coverage
    • Creditable 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.

How much do Medicare Supplement Insurance plans cost?

The amount of the Medicare Supplement plan—also called Medigap—monthly premiums can vary widely. The premiums are set by the private insurance companies offering the plans and are based on a variety of factors such as age, health status, gender and more. Insurance companies may even charge different premiums for the same Medicare Supplement plan in different locations, which is why it’s in your best interest to shop around to ensure you’re paying the lowest amount possible for Medigap coverage. Companies may not cancel your coverage unless you don’t pay the plan premium, you weren’t truthful on the application or the Medigap insurance company becomes bankrupt or insolvent.

Let SelectQuote Help You Navigate the Cost of Medicare

Finding Medicare a little overwhelming? Want help finding your best plan options? SelectQuote can help. From getting through the basics to navigating the more complex cases, working with us can save you time and probably some money, too! In just minutes, we can compare all Medicare options available in your area. It’s a free service and there’s no obligation to enroll.

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