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Medicare Costs That You Need to Know

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Summary: Common Medicare costs include premiums, copayment, coinsurance, deductibles and out-of-pocket limits. Each Medicare plan may have different costs associated.

Since Medicare is a federal government-sponsored health insurance program, you may think it covers every dollar of your health-care costs, but it doesn’t. Read on to learn about your Medicare costs and other Medicare plan options to consider.

If you’re not sure what kind of coverage you have, check your health insurance cards. You can also call Medicare (contact information is at the bottom of this page).

Original Medicare (Part A and Part B) costs

Original Medicare refers to Part A (hospital insurance) and Part B (medical insurance). Common Part A and Part B costs are summarized below.

Original Medicare Costs: Premiums

Medicare Part A is premium-free if you’ve worked at least 10 years (40 quarters) while paying Social Security taxes. If you worked 30 to 39 quarters while paying these taxes, your monthly premium is $240 (in 2019), and $437 in 2019 if you’ve worked and paid taxes for less than 30 quarters.

Your Medicare Part B premium can vary depending on your situation. For many people, the premium is automatically deducted from their Social Security benefits./m,],][m ’

In 2019, the standard Part B monthly premium is $135.50. Your premium could be higher, as there are different premiums for different income levels.

For more details about the Medicare Part B premium, see Medicare Premium and Deductible Costs for 2020.

Original Medicare Costs: Other out-of-pocket costs

Under Original Medicare, there may be other out-of-pocket costs besides premiums. You’re likely to pay a copayment or coinsurance for doctor visits and certain preventive services, although some preventive services (such as flu shots and certain screenings) are free if you get them through Medicare-assigned health-care providers. If you’re hospitalized in a Medicare-enrolled hospital, many services and supplies are covered, but you’ll typically pay coinsurance for a hospital stay longer than 60 days. Again, follow the link above for more details about your Original Medicare costs.

There are also deductibles you must pay under Medicare Part A and Part B before Medicare pays toward health-care services and supplies. Amounts shown are for 2019.

  • Medicare Part A — $1,364 per benefit period. A benefit period starts when you’re admitted as an inpatient to a hospital or skilled nursing facility, and ends when you haven’t had inpatient care for 60 consecutive days.
  • Medicare Part B — $185 per year

Medicare Advantage plans costs

Do you know that you can get your Original Medicare benefits through a Medicare Advantage plan? Medicare Advantage plans are available through private insurance companies approved by Medicare. If you’re in a Medicare Advantage plan, you most likely have a membership card from the plan, and you might pay a monthly premium in addition to your Medicare Part B premium.

Because your Medicare Advantage coverage comes through a private insurance company, costs may vary depending on the type of plan you have, the company offering the plan, and where you live.

You might have to pay any or all of the following:

  • monthly plan premium
  • copayment or coinsurance for doctor visits and services
  • deductible

However, Medicare Advantage plans have yearly out-of-pocket maximum amounts. After your out-of-pocket costs reach that maximum, the plan pays for the rest of your Medicare covered services for the year. According to eHealth research, the average out-of-pocket limit for Medicare Advantage plans decreased from $5,815 to $5,164 in 2019.

Medicare Advantage Out of Pocket Maximum

If you have a Medicare Advantage Prescription Drug plan which includes prescription drug coverage, you may have to pay coinsurance or a copayment when you buy your prescriptions. See Medicare Prescription Drug Plans below. Note that under a Medicare Advantage Prescription Drug plan, you wouldn’t be paying a separate premium for the prescription drug coverage.

Medicare prescription drug coverage costs

If you’re enrolled in a stand-alone Medicare Part D Prescription Drug Plan, you might pay a monthly plan premium (besides your Medicare Part B premium).

With any type of Medicare Prescription Drug Plan, including Medicare Advantage Prescription Drug plans, your costs may vary and might include copayment or coinsurance for prescription drugs, as well as a deductible amount (up to $415 in 2019). According to eHealth research, average deductibles for Part D plans increased from $292 to $308 in 2019.

Average Deductible by Product

If you have many or costly prescriptions, you might reach a threshold known as the Medicare Part D coverage gap (also called “donut hole”) where you might pay a higher amount for your prescriptions. For more details, see Medicare Part D Coverage Gap.

Medicare Supplement (Medigap) plans costs

Medicare Supplement (Medigap) policies are available from private insurance companies, and can help pay your out-of-pocket costs for services covered under Original Medicare.

If you have a Medicare Supplement plan, it usually charges a monthly premium. According to eHealth research, the average premium of a Medicare Supplement plan increased from $141 to $152 per month in 2019.

Average Medicare Monthly Premiums

The various standardized Medigap plans cover different portions of your Medicare out-of-pocket costs.

Medicare costs summary

As you can see, your annual Medicare costs depend on the type of Medicare plan you have, how often you have doctor visits, your prescription drug costs, and other factors.

Keep in mind that some costs are monthly (premiums) and other costs are annual (such as deductibles). This means that at the start of every year, amounts such as your deductible and out-of-pocket maximum amount “reset” to zero, and you generally need to pay the annual deductible for the new year before Medicare (or your Medicare health plan) pays for your health-care costs. Also, note that costs may change from year to year.

Would you like to explore Medicare plan options in your area to compare costs and coverage? Just enter your zip code where indicated on this page to display a list of plans in your area, or use the contact information below to call and talk to one of eHealth’s licensed insurance agents.

This website and its contents are for informational purposes only. Nothing on the website should ever be used as a substitute for professional medical advice. You should always consult with your medical provider regarding diagnosis or treatment for a health condition, including decisions about the correct medication for your condition, as well as prior to undertaking any specific exercise or dietary routine.

eHealth’s Medicare website is operated is operated by eHealthInsurance Services, Inc., a health insurance agency licensed to sell Medicare products.

The purpose of this communication is the solicitation of insurance. Contact will be made by an insurance agent/producer or insurance company.

Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program.

This information is not a complete description of benefits. Contact the plan for more information. Limitations, copayments, and restrictions may apply. Benefits, premiums and/or copayments/co-insurance may change on January 1 of each year.

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