Medicare’s Annual Costs
Since Medicare is a 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.
What Medicare coverage do you have? The various categories are laid out below.
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)
Original Medicare refers to Part A (hospital insurance) and Part B (medical insurance). Common Part A and Part B costs are summarized below.
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 $232 (in 2018), and $422 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.
- If you pay your Part B premium through your monthly Social Security benefit, the average cost per month is $130.
- Your monthly premium is generally $134 if any of the following applies to you:
- You enrolled in Medicare Part B for the first time in 2018.
- You don’t receive Social Security benefits.
- You are directly billed for your Part B premiums.
- You quality for both Medicare and Medicaid benefits (you’re dual-eligible).
- Your income exceeds a certain amount. Your premium could be higher than the amount listed above, 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 2018.
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 2018.
- Medicare Part A — $1,340 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 — $183 per year
Medicare Advantage plans
Are you enrolled in a Medicare Advantage plan? You can get your Original Medicare benefits through this type of plan, 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: a monthly plan premium; copayment or coinsurance for doctor visits and services; and a 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.
If your plan includes prescription drug coverage, you may have to pay coinsurance or a copayment when you buy your prescriptions. See Medicare Prescription Drug Plans below, but note that under a Medicare Advantage Prescription Drug plan, you wouldn’t be paying a separate premium for the prescription drug coverage.
You still pay your Medicare Part B premium when you’re enrolled in a Medicare Advantage plan.
Medicare prescription drug coverage
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 $405 in 2018). 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) 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 Medigap plan, it usually charges a monthly premium. 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.