How Much Does Medicare Cost in 2020 and How to Avoid its Financial Gaps
How much does Medicare cost? If only it was a simple answer. The cost of Medicare can vary sharply according to various plans and benefits available, such as frequency of use, cost of specific procedures, co-pays, and prescriptions to name a few. In addition to Original Medicare (Part A and Part B), there are also options for supplemental coverage through Medigap plans and Medicare Advantage to supplement health benefits and costs not covered under Original Medicare. Currently, there are nearly 40 million Medicare beneficiaries enrolled in Medicare Part A and Part B. In order to select a Medigap or Medicare Advantage plan, you must first have Original Medicare, so let’s take a look at the specific costs surrounding Part A and Part B.
The Cost of Medicare Part A
A quick overview on benefits of Medicare Part A according to cms.gov: Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services.
99% of Americans who are eligible for Medicare Part A do not have to pay a monthly premium. This is due to the Medicare taxes they paid while working. However, if a Medicare beneficiary did not pay Medicare taxes for at least 30 quarters, they will pay $458 each month as a premium for Part A. Those who paid between 30-39 quarters would pay a Part A premium of $252 per month.
If you end up needing to stay in the hospital as an inpatient (you have been admitted), then you will pay a deductible of $1,408 per benefit period. This covers the first 60 days. Medicare beneficiaries are responsible for a daily coinsurance rate of $352 for days 61-90 when hospitalized. Additional daily coinsurance for lifetime reserve days is $704. The daily coinsurance rate for days 21-100 in a Skilled Nursing Facility is $176 per day.
If you are someone who is frequently admitted to the hospital for long stretches of time, the coinsurance of Part A will add up quickly.
How Much Does Medicare Part B Cost?
Remember, Medicare Part B coverage includes physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.
The standard monthly premium for Part B is $144.60. This is the cost that most Medicare beneficiaries pay, however those with modified adjusted gross incomes can be subject to a higher monthly premium. See more on that here. The Part B annual deductible is $198. Once your deductible is met, you will be responsible for 20% coinsurance for any Medicare-approved services or supplies. This does not include the cost of prescription medication. Those are not covered under Parts A or B.
Supplementing the Gaps of Medicare Part A and Part B
According to CMS.gov, of the 38 million people enrolled in Original Medicare, 25 million are enrolled in Medicare Advantage, Medigap, or other supplemental coverage. That’s 25 million Americans who have recognized how quickly the cost of Original Medicare can add up and just how risky that can be to the health of finances during retirement.
If you would like to learn more about options available to you to supplement the cost of Medicare, let’s connect so we can learn more about your specific needs.