Many of our clients are surprised to find out that even though they have been paying into Medicare during their entire working career, in most cases they will still be responsible for additional costs associated with their Medicare coverage. My job is to try to help you plan for these additional costs and to help you select a plan that will help cover you for these expenses.
So, what costs can you expect to incur when you get ready to enroll on Medicare? We have provided the breakdown to help you estimate below
2021 Medicare Cost Breakdown
Part A Premium
If you or your spouse has been paying into Medicare for a minimum of 40 quarters (10 Years) then you should not have to pay an additional Part A premium. 99% of beneficiaries will qualify for premium free Part A
If you and your spouse have not satisfied the Part A premium through your work history, then you will be responsible for enrolling in Part A and paying an additional premium each month.
- If you paid Medicare taxes for 30-39 months, then your additional premium will be $259.00.
- If you paid Medicare taxes for less than 30 months, then your additional premium will be $471.00
If you don’t enroll in Part A and you don’t start paying your additional premium when you are first eligible then your premium will go up 10%. You will need to pay this higher premium for twice the number of years that you should have been paying for Part A but didn’t sign up.
Part A Deductible
$1484.00 for each benefit period
Part A Co-Insurance (Inpatient Hospital)
Days 1-60 $0 Co-Insurance
Days 61-90 and beyond $ 371.00 Per Day
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 – You are responsible for all costs
Part B Premium
The standard monthly premium for Part B of Medicare is $148.00. Typically, this premium amount will be deducted from your social security check. If you have not enrolled in social security benefits yet, then you will be billed quarterly by Medicare. The part B premium is determined by your income. In some cases, you may qualify for financial assistance in paying your part B premium. Contact me today to learn if you may be eligible for one of these programs.
If you adjusted gross income reported on your tax return 2 years ago is above a certain amount, then you may need to pay an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is a monthly charge that will be added to your monthly premium. Refer to the chart in Part B cost details to determine if you will need to pay an IRMAA
Part B Late Enrollment Penalty
If you don’t enroll in Part B of Medicare when you are first eligible then you may have to pay a late enrollment penalty. Your monthly premium for Part B can go up 10% of the standard premium for each 12-month period that you could have had Part B and you did not sign up for it. You will have this penalty for as long as you have Part B. Additionally, you may have to wait until the next General Enrollment Period Jan 1st – March 31st to enroll in Part B coverage which will begin in July.
Part B Deductible
The Part B deductible for 2021 is $203.00
Part B Co-Insurance
After the Part b deductible is met then you typically will be responsible for 20% of the Medicare approved costs for most of your provider services including while you are a hospital in-patient, during outpatient therapy, and for the costs with Durable Medical Equipment (DME).
Part C Premium
Part C of Medicare is a Medicare Advantage plan. The plan premiums for Part C of Medicare or “Medicare Advantage” will vary from plan to plan. Contact me today and I can help you compare your plan options and together we can see if a Medicare Advantage plan will make sense for you.
Part D Premium
The standard part D plan premium for 2021 is $33.06 however the cost of a Part D plan premium may vary considerably depending on the plan and formulary design. It is also critically important to remember that just like Part B, you may have to pay more for your Part D based off your income.
Part D Late Enrollment Penalty
Once you enroll in Medicare if you go without Medicare prescription drug coverage or other drug coverage that is considered creditable drug coverage then you may have to pay a late enrollment penalty. Medicare calculates this penalty by charging you an additional 1% of the national standard Part D premium for each month that you didn’t have drug coverage. This amount is added to your monthly Part D premium and it may change every year.