Basic Costs of Medicare

Part A, B, C, & D

Medicare can significantly ease the financial burden many Americans face for health care goods and services. However, Medicare won’t cover every medical expense you’re likely to face. Familiarize yourself with the out-of-pocket costs associated with Medicare Part A, B, C, and D to help manage your budget.

Medicare Part A Out-Of-Pocket Costs

Medicare Part A is known as hospital insurance. You might be surprised to learn you’ll face some fees if you’re admitted to the hospital.

  • $1,340 deductible
  • $335 per day coinsurance for 61st to 90th day of stay
  • $670 per day coinsurance for 91st and additional days’ stay

These fees apply when you stay in:

  • A regular hospital
  • An acute-care hospital
  • A critical access hospital
  • A long-term care hospital
  • An inpatient rehabilitation facility
  • A qualifying clinical research study facility
  • An inpatient mental health care facility

After you use your lifetime reserve days, you must pay all of your hospital expenses. In addition to these fees, you’ll face out-of-pocket costs for the following hospital services:

  • Private-duty nursing
  • A private room, unless it’s medically necessary
  • Entertainment services not included in the room fee, like television or phone access
  • Personal-care items

Medicare Part B Out-Of-Pocket Costs

Medicare Part B is known as doctor’s office insurance. You’ll pay a monthly premium to maintain this coverage. This amount can be automatically taken out of your benefits.

In 2018, the standard Part B monthly premium is $134. However, you’ll pay more if you earn more than $85,000 a year. You’ll pay less if the premium is deducted from your Social Security benefit.

Your Medicare Part B coverage pays for necessary medical treatments and preventative health care services. You’ll face out-of-pocket expenses if treatment isn’t deemed necessary. You may also face out-of-pocket fees for some preventative tests, like mammograms, if you don’t meet specific criteria.

Medicare B users also pay $183 for their deductibles. After this time, they typically pay around 20% of the cost of:

  • Most doctor services
  • Durable medical equipment
  • Outpatient therapy

Medicare Part C Out-Of-Pocket Costs

Out-of-pocket costs for Medicare Part C often called Medicare Advantage, vary depending on a number of factors, including:

  • Whether the plan charges a monthly premium
  • Whether the plan has deductibles
  • Whether the plan pays for all or part of the Medicare Part B premium
  • The plan’s annual limit on out-of-pocket expenses
  • The price of copayments and coinsurance
  • The type of healthcare services you’ll use and how frequently you’ll use them
  • Whether your doctor or health care supplier accepts assignment
  • Whether you use network providers
  • Whether you need extra benefits
  • Whether extra benefits are complimentary or incur additional charges
  • Whether you have Medicaid or additional help

Common out-of-pocket expenses for people with Medicare Part C include:

  • Monthly premiums (usually between $0 and $200)
  • An annual deductible
  • Copayments

Medicare Part D Out-Of-Pocket Costs

Medicare Part D prescription drug coverage helps lower the cost of prescription medications. You should expect a number of out-of-pocket costs with Medicare Part D, including:

  • Monthly premiums. These will increase if you make more than $85,000 a year or $170,000 as a couple
  • An annual deductible. In 2018, this will not be more than $405.
  • Copayments or coinsurance
  • Costs in the coverage gap. As of 2018, this happens once you’ve spent $3,750 on medications in a single year. While you’re in the coverage gap, you’ll pay no more than 40% of the price of brand-name medications and 51% of the price of generic medications. In 2018, you’ll leave the coverage gap once your out-of-pocket expenses reach $5,000.

Medicare Part D costs will vary from person to person, depending on a number of factors like:

  • Your prescription medications, including whether they’re on your plan’s formulary
  • Your plan
  • Whether you use a pharmacy in your plan’s network
  • Whether you get Extra Help for your Medicare Part D expenses. People that get Extra Help never incur costs in the coverage gap as other Medicare Part D users do.

Additional Out-of-Pocket Costs for Medicare Users

No matter what Medicare coverage you have, there are a number of other common medical goods and services the system doesn’t cover. These include:

  • Prescription eyewear and contact lenses
  • Dental care and procedures
  • Hearing aids
  • Nursing home care after 100 days

Make sure you build a nest egg so that you can afford these health care services and products when you need them.

Do you know someone who should learn more about Medicare costs? Share this post and let them know how they can save on out-of-pocket costs.


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