What Does Medicare Cost?
Most people assume that Medicare is free but, in fact, it is not. Beneficiaries are generally responsible for premiums, deductibles, copays, and coinsurances. Some of these costs, however, may be covered by programs like Extra Help and Subsidies.
Part A premiums for 2021
Most Medicare beneficiaries do not pay a monthly premium for Part A (sometimes called “premium-free Part A”) so long as the beneficiary or their spouse worked and paid Medicare taxes for at least 40 quarters. If the beneficiary or spouse paid Medicare taxes for fewer than 30 quarters, the standard Part A premium is $471. If the beneficiary or spouse paid Medicare taxes for 30-39 quarters, the standard Part A
premium is $259.
With Part A Hospital Inpatient Deductible and Coinsurance, the Beneficiary Pays:
- $1,484 deductible for each benefit period.
- Days 1-60: $0 coinsurance for each benefit period.
- Days 61-90: $371 coinsurance per day of each benefit period.
- Days 91 and beyond: $742 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime).
- Beyond lifetime reserve days: all costs.
Part B premiums for 2021
Medicare beneficiaries must pay a premium each month for Part B. Their Part B premium will be automatically deducted from their benefit payment if they receive benefits from:
- Social Security
- Railroad Retirement Board
- Office of Personnel Management
If they do not receive these benefit payments, they’ll be billed for the premium. For 2021, the standard Part B premium amount is $148.50, and this is what most beneficiaries will pay. However, if the beneficiary’s modified adjusted income – as reported by their IRS tax return from 2 years before – is above a certain amount, they will pay an Income Related Monthly Adjustment Amount (IRMAA) in addition to their premium.