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Medicare Part A and B Cost Basics

Part A and B (Original Medicare) Cost Explanation

Key Takeaways

  • Medicare Part AMedicare Part A, also called "hospital insurance," covers the care you receive while admitted to the hospital, skilled nursing facility, or other inpatient services. Medicare Part A is one of the pain parts of Original Medicare. does not have a premiumA premium is a fee you pay to your insurance company for a health plan coverage. This is usually a monthly cost. cost for enrollees who have worked for at least ten years.

  • Medicare Part BMedicare Part B is the portion of Medicare that covers your medical expenses. Sometimes called "medical insurance," Part B helps pay for the Medicare-approved services you receive. premiums for 2020 start at $144.60 and increase depending on your income. Not enrolling on time can increase your premium amount.

  • Medicare Part A and Part B cover most of your healthcareHealthcare is the industry dedicated to maintaining or improving health and well-being. services (hospital and medical). You can add supplemental insurance to help cover the costs of Original Medicare (Parts A and B)Original Medicare (Parts A and B) is fee-for-service health insurance available to all Americans aged 65 and older and some individuals with disabilities. Original Medicare is provided by the federal government and is made up of two parts: Part A (hospital insurance) and Part B (medical insurance)..

What Do Medicare Part A and Part B Premiums Cover?

Medicare has different parts and plans, but the most common is Original Medicare (Parts A and B). Parts A and B are available to all Americans 65 years of age and older and individuals under 65 with certain disabilitiesA disability is an illness or injury that limits daily activities. Disability insurance may be part of your health plan, or you may buy it to supplement your health plan. Disability coverage usually pays for some or all of your salary if you can't work..

Keep in mind, Parts A and B provide different coverage:

Part A (Hospital Insurance)Part B (Medical Insurance)
HospitalDoctors services
Skilled Nursing staysOutpatient therapies
Some Home HealthDurable medical equipment
And moreAnd more

You need to know, like coverage, they also are different in cost. If you are new to Medicare, we have answers to help you make the right choice for your health and budget.

How Much Does Medicare Part A Cost?

The cost of Medicare Part A premiums [1] depends on whether you or your spouse paid income taxes, and for how long. Most individuals won’t pay a Part A premium. Here are some essential facts about Part A and what it costs.

 

Medicare Part A Premiums

Medicare calculates Part A premium costs by how long you or your spouse have paid Medicare taxes.

Here is an explanation of monthly premiums for Plan A:

 

$0/mo.

If you or your spouse paid Medicare taxes for ten years or more

 

$252/mo.

If you or your spouse paid Medicare taxes for more than 7.5 years but less than 10

 

$458/mo.

If you paid Medicare taxes for fewer than 7.5 years

 

Medicare Part A Deductible

Most Part A costs come from the inpatientInpatient refers to medical care that requires admission to the hospital, usually overnight. hospital deductible. Inpatient care provided at a hospital or skilled nursing facilitySkilled nursing facilities provide in-patient extended care with trained medical professionals to help with recovery from injury or illness and activities of daily living. These facilities provide physical and occupational therapists, speech pathologists and the medical professionals assist with medications, tube feedings and wound care. Skilled nursing stays are usually covered under Medicare Part A. will require you to pay the annual deductible.

For the year 2020, the Plan A deductible increased from 2019:

  • Medicare Part A deductible 2019: $1,364
  • Medicare Part A deductible 2020: $1,408

Medicare Part A Co-insurance

Your Part A deductible will cover the first 60 days [2] of inpatient care. You’re responsible for a daily co-insuranceCo-insurance is the percentage of your medical costs that you pay after you meet your deductible. The remaining amount is paid by your insurance company. For example: If you have a $1,000 medical bill and your co-insurance is 20%, you'll pay $200. Your insurance company will cover the final $800. amount beyond 60 days. The type of facility and how long you stay affect the daily co-insurance amount.

Part A co-insurance increases when your length of stay in a facility increases:

  • 0 to 60 days
  • 61 to 90 days
  • You have a lifetime limit of reserve days to use if your stay lasts longer than 90 days.

Medicare Part A Daily Co-insurance Rates:

  • Days 0-60: $0
  • Days 61-90: $352 per day
  • Lifetime Reserve Days: $704 per day

If you need skilled nursing care, your daily co-insurance amount is $176 for days 21-100.

How Much Does Medicare Part B Cost?

Your monthly premiums and annual deductible help make up the cost of Medicare Part B. These payment amounts answer the question, “how much is Medicare Part B?”

 

Medicare Part B Premiums

Each year, Medicare Part B premiums can go up or down. How does the 2020 Medicare Part B premium stack up? Here’s a breakdown:

  • Medicare Part B premium 2017: $134
  • Medicare Part B premium 2018: 134
  • Medicare Part B premium 2019: $135.50
  • Medicare Part B premium 2020: $144.60

Your income plays a part in your Part B premium. For 2020, individuals making $87,000 per year or less, and couples making $174,000 or less, pay the standard monthly amount of $144.60 each.

If your individual or joint income is above the standard bracket, you may pay an Income-Related Monthly Adjustment (IRMAA)Income-Related Monthly Adjustments determine the premium costs for Medicare Part B and Part D based on your income. If you have a higher income and are enrolled in Medicare Part B or D, you are likely to have higher premiums. The IRMAA amounts change each year.. Find your IRMAA rate for 2020 below:

Annual income: Individual (up to $87,000) & Joint (up to $174,000)

  • IRMAA: $0
  • Part B premium: $144.60

Annual income: Individual ($87,000 to $109,000) & Joint ($174,000 to $218,000)

  • IRMAA: $57.80
  • Part B premium: $202.40

Annual income: Individual ($109,000 to $136,000) & Joint ($218,000 to $272,000)

  • IRMAA: $144.60
  • Part B premium: $289.20

Annual income: Individual ($136,000 to $163,000) & Joint ($272,000 to $326,000)

  • IRMAA: $231.40
  • Part B premium: $376

Annual income: Individual ($163,000 to $500,000) & Joint ($326,000 to $750,000)

  • IRMAA: $318.10
  • Part B premium: $$462.70

Annual income: Individual ($500,000 and above) & Joint ($750,000 and above)

  • IRMAA: $347.00
  • Part B premium: $491.60

Part B Late Enrollment Penalty

The last factor that determines your Part B premium amount is when you sign up. If you enroll as soon as you’re eligibleSome health plans require you to meet minimum requirements before you can enroll. The rules of eligibility can vary by plan. for Part B, your monthly premium will follow the formulas above.

If you sign up later, you may pay a 10% penalty for each 12-month period you missed. If you enroll at 67 (when eligible at 65), your monthly premium payment will be 20% higher than the table above.

 

Medicare Part B Deductible

All Medicare enrollees pay the same monthly deductible. Like your premium, the annual deductible adjusts each year. For example:

  • Medicare Part B deductible 2019: $185
  • Medicare Part B deductible 2020: $198

Medicare Part B Co-insurance

Once you meet your deductible, you’ll pay 20% of all Medicare-approved services you receive. Services can include doctor services, outpatient therapy and durable medical equipment.

For example: If your doctor charges $100 for visits, you’ll pay 20% ($20) after you’ve met your deductible.

What Else Should I Consider?

Original Medicare (Parts A and B) is most common and has remained popular over the years. There are, however, other options that you may want to consider. For example:

Medicare Advantage: Also called Medicare Advantage Plan (Part C)Medicare Advantage is health insurance for Americans aged 65 and older that blends Medicare benefits with private health insurance. This typically includes a bundle of Original Medicare (Parts A and B) and Medicare Prescription Drug Plan (Part D)., this is an alternative to Original Medicare that provides additional benefits like dental, vision and prescription drug coverage. These plans are regulated by Medicare but provided through private insurance companies. It’s also important to know that Medicare Advantage also has its own Annual Enrollment Period (AEP).

Medigap: Medicare Supplement Insurance (Medigap)Medicare Supplement Insurance (Medigap) are policies designed to provide coverage that Original Medicare (Parts A and B) do not. Medigap policies are purchased in addition to Original Medicare and have their own monthly premiums you'll need to pay. fills the holes in your policy that aren’t covered by Original Medicare. These are purchased in addition to your Medicare coverage and are offered by private insurance companies.

Medicare Part D: Standalone, private prescription drug insurance that works with Original Medicare. With Medicare Prescription Drug Plan (Part D)Medicare Prescription Drug Plan (Part D) is prescription drug coverage for people enrolled in Medicare. Part D is optional and is offered by private insurance companies., you can enroll at the same time as Original Medicare, or during the fall Enrollment Period.

Medicare & Medicaid: MedicaidMedicaid is a state-based health insurance program based on an individual's financial needs. is a public health insurance option designed for people with low-income or limited resources. If you qualify for both Medicare and Medicaid, you are considered “dual eligible”Dual eligible individuals are enrolled in both Medicare and Medicaid. and can receive greater financial assistance.

FAQs

Does My Health Play Any Role in My Costs?

No. If you’re enrolled in Original Medicare (Parts A and Part B), your health won’t play a role in how much you pay for your Medicare coverage. Part A is determined by how long you paid Medicare taxes. For Part B, all enrollees pay the same deductible while premiums are calculated using income and whether you signed up on time.

What If I Can’t Afford Part B?

If you’re at least 65 and can’t afford your Medicare Part B premium or deductible, there may be help [3] . Medicare Savings ProgramsMedicare Savings Programs help those with low incomes pay premiums and sometimes co-insurance for Medicare expenses. (MSP) are designed for low-income individuals who have trouble affording healthcare. The four types of MSPs in 2020 are:

  • Qualified Medicare Beneficiary Program (QMB): helps pay premiums, co-pays, deductibles and co-insurance for Parts A and B.
    • Who’s eligible: individuals with income up to $1,084 per month; couples making up to $1,457
  • Specified Low Income Medicare Beneficiary Program (SLMB): helps pay Part B premiums
    • Who’s eligible: individuals making up to $1,296 per month; couples making up to $1,744
  • Qualified Individual Program (QI): helps pay Part B premiums
    • Who’s eligible: individuals making up to $1,456 per month; couples making up to $1,960
  • Qualified Disabled and Working Individuals Program (QDWI): helps pay Part A premiums for disabled people that have returned to work
    • Who’s eligible: individuals making up to $4,339 per month; couples making up to $6,000

If you need help finding an affordable Medicare plan, contact GoHealth. Our licensed insurance agents can help you navigate the different options and see what makes the most sense for you.

When Can I Enroll In Plan A and Plan B?

Your first chance to sign up for Original Medicare is during your Initial Enrollment Period (IEP)The initial enrollment period is a seven-month enrollment period when individuals, who are not automatically enrolled in Medicare, can sign up for Parts A and B. The period begins three months before your 65th birthday month, includes your birthday month, and continues for three months following your 65th birthday month.. To figure out your IEP, follow the seven-month rule; your enrollment window includes the three full calendar months before the month you turn 65. It remains open during your birth month, and the three months after. For example: If your birthday is in June, your seven-month window will open Mar. 1 and close Sept. 30.

3 months before your 65th birthday: May, April, Mar.
Your birth month: June
3 months after you turn 65: July, Aug., Sept.

If you missed your IEP, there are other enrollment periods available. You may be eligible for a Special Enrollment Period due to a Qualifying Life Event (QLE)Qualifying Life Events (QLE) are life changes that allow you to enroll in a new health insurance plan during a Special Enrollment Period. These include having or adopting a child, losing other coverage, marriage, a change of income and moving.. There is also a designated time to change your Medicare plan. Learn all about Medicare’s different enrollment periods–and how GoHealth can help you.

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