Medicare costs vary depending on if you have certain Medicare insurance products. However, there are some costs that are the same for everyone and we will break them down here.
Costs for Medicare Part A
Medicare Part A has a deductible of $1,408 in 2020. If you have worked at least 10 years, there is no premium for Part A because of certain taxes you paid while working.
If you have to pay a premium for Medicare Part A, it will depend on how many quarters you worked:
- If you paid Medicare taxes for less than 30 quarters — $458 per month
- If you paid Medicare taxes for 30-39 quarters — $252 per month
There is coinsurance involved with Medicare Part A as well. Your coinsurance depends on number of days spent in the hospital:
- Days 1-60: $0 coinsurance for each benefit period
- Days 61-90: $352 coinsurance per day of 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
Costs for Medicare Part B
Medicare Part B has a deductible of $198 in 2020. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you’re a hospital inpatient), outpatient therapy, and durable medical equipment. Depending on which state you live in, doctors may be able to charge what is called “excess charges” above what Medicare pays for.
There is also a premium of $144.60 or higher depending on your income.
Should you have to pay for your Part A premium, if you miss your initial enrollment period (if not automatically enrolled) you will have to pay an additional 10% premium for twice the number of years you could have had Medicare Part A.
If you fail to sign up for Part B on time, you will pay an extra 10% premium for every 12-month period you should have had Part B.
The premium for Part B in 2020 is $144.60. So, you’ll pay an additional $14.46 each month for the rest of your life.
In addition, if you do not have creditable prescription drug coverage and choose to sign up for a Part D plan later, you’ll have a late penalty for that plan too.
Part D’s penalty is 1% per consecutive month that you went without coverage and then rounded to the nearest 10 cents. The national base premium is $32.74 per month in 2020. That’s an additional $3.90 per month if you went without coverage for one year.
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