Medicare’s core principles are solidarity, universality, and equity. These principles help ensure that all people have access to the care they need, regardless of income or medical history.
Medicare is funded by a combination of payroll tax, general revenue, and beneficiary premiums. Depending on the beneficiary and the plans you choose, you will pay monthly premiums, deductibles, and/or copayments.
Let’s discuss the costs of Medicare below.
Costs for Hospital and Outpatient Coverage (Medicare Parts A and B)
Medicare Part A covers inpatient hospital, skilled nursing facility, home health, and hospice care services. For most people with Part A who have paid into the system for 40 or more quarters (10 years), no premiums are charged. If you paid payroll tax for between 30-39 quarters (7.5 to 9.75 years), the premiums would cost you $259 a month. And if you paid for less than 30 quarters (7.5 years), the premiums will cost $471 a month.
Medicare Part B covers the costs of outpatient services, including doctor’s office visits, hospital outpatient care, laboratory tests, and some preventive services. Part B also covers the costs of durable medical equipment, including wheelchairs and hearing aids.
Most people with Medicare pay for Medicare Part B as part of their monthly Social Security benefits. Part B premiums are deducted from Social Security benefits, with most beneficiaries paying $148.50 a month in 2021.
Costs for Medicare Advantage (Medicare Part C)
Some seniors who need more care and coverage opt to join a plan called Medicare Advantage. Private health insurers offer these plans, and they range widely in cost, from $0 per month to over $100 a month, depending on what is covered. The average Medicare Advantage premium in 2018 was $30 monthly.
Since these plans vary widely, you will need an expert to help you sort through the different plan options and coverage.
Costs for Medicare Prescription Drug Coverage (Medicare Part D)
Medicare Part D covers outpatient prescription drugs.
Most people with Medicare pay for Part D as part of their monthly Social Security benefits.
Premiums for Part D are deducted from Social Security benefits. In 2017, the standard premium cost $35.60 a month.
Beneficiaries who have incomes over $88,000, or couples who have incomes over $176,000, are required to pay an income-related monthly adjustment amount.
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At Medicare With Jake, we understand how confusing Medicare can be. That’s why if you need help sorting out your coverage and the costs involved with each plan, give us a call today. We’re here to help!
