Costs of Medicare

Costs of Medicare

The cost of your Medicare coverage depends on the plans you are enrolled in, location, and insurance provider. However, all of your payments are based on premiums, deductibles, and copayments/coinsurance.

There are a few ways to determine the costs of Medicare, starting with your basic Original Medicare coverage.

The Cost of Original Medicare

Because Original Medicare is a federal program, its costs are mostly universal. Just like all insurance, you will have to pay monthly premiums and a yearly deductible.

There are two parts of Original Medicare—Part A and B. The good news? You will likely not have to pay premiums for Part A. If you have worked for at least 10 years as a U.S. citizen while paying Social Security taxes, you will not have to make these monthly payments. However, you will have to pay the yearly deductible, which is $1,484 in 2021 for Part A.

For Part B, you will have to pay both premiums and a deductible. As of 2021, the deductible for Part B is $203. This is significantly lower than Part A because, unlike Part A, you make monthly payments for continued coverage. The premium for Part B in 2021 is $148.50.

For most benefits received through Original Medicare, you will have to pay an out-of-pocket fee. Say you get a flu shot and use your Part B coverage. You will have first had to have paid your yearly deductible and kept up with your premiums.

Then, you will have to pay either a copayment or coinsurance fee. A copayment is a flat fee—say, $20 for a flu shot. Coinsurance, on the other hand, is a percentage of the total cost of the service, typically 20%.

Additional Coverage Options and Costs

Beyond Original Medicare, you have a few other additional coverage options:

  • Medicare Advantage (Part C)
  • Medicare Part D
  • Medicare Supplements (Medigap)

Medicare Advantage is one of the least expensive plans, with little to no monthly premiums. However, the cost of these specific plans varies depending on factors such as location and provider.

Lowering the Price of Medicare

Lowering Medicare costs is tricky. If you have exceptional financial need, you may also be eligible for Medicaid, a federal financial aid program. With both Medicare and Medicaid, you are eligible for the Medicare Advantage Dual-Eligible Special Needs Plan (D-SNP). This plan will reduce your out-of-pocket costs significantly.

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