Cost of Medicare
The cost of Medicare depends on a few key factors, including the plan(s) and the provider you choose, its premium, deductible, and overall out-of-pocket charges. Let’s take a look at the cost for each part of Medicare.
Cost of Original Medicare (Part A and Part B)
Original Medicare is provided by the federal government, making it one of the least expensive Medicare options. Part A may cost you next to nothing if you qualify for the premium-free option. A premium is a monthly cost you must pay to maintain coverage. If you have worked for at least ten years as a U.S. citizen while paying Social Security taxes, you are exempt from this fee.
Part B, on the other hand, does not offer a premium-free option. It still, however, has relatively low out-of-pocket costs. In general, your costs for a Part B plan will look something like this:
- Monthly Premium: Your monthly premium is based on your IRS tax return and Income Related Monthly Adjustment Amount (IRMAA). The standard monthly premium for 2021 is $148.50.
- Copayments/Coinsurance: These cost-sharing fees are required for certain services/equipment. The typical rate is 20%, but this is subject to change depending on the service and limited under Medicare.
- Deductible: This is a yearly fee that is automatically subtracted from your Social Security.
Cost of Medicare Part C and D
Medicare Part C, also known as Medicare Advantage, is an alternative to Original Medicare. It combines all of the benefits of Original Medicare (Parts A and B) and provides additional health service coordination services and benefits to lower your costs for care. The specific cost for an Advantage plan will, then, vary depending on your address and chosen provider. The same can also be said for Part D prescription drug coverage. In general, then, your cost for either of these plans will depend on its:
- Monthly Premium
- Yearly Deductible
- Limit on Out-of-Pocket Costs
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