Depending on the coverage you choose, you may find that Medicare is less expensive than what you had from your employer. In 2023, individual workers paid, on average, about $117 a month for their share of health insurance and had an average annual deductible of $1,735, according to a Kaiser Family Foundation study. Employers spent about $586 a month as their part of that one-person coverage.
Medicare Part A hospitalization is free to workers who have paid Medicare taxes for 40 quarters or who are eligible through their spouse. You pay a $1,632 Part A deductible in 2024 only if you're hospitalized as an inpatient.
Part B coverage for doctor and outpatient services costs $174.70 a month in 2024 for most people and has an annual deductible of $240.
Part D provides prescription drug coverage. In 2024, the monthly cost ranges from about $1 to $108, depending on the plan. The average plan costs $55.50 per month.
Medigap plans, whose prices vary widely depending on the insurer, policy type and pricing method, will pay Part A deductibles. Plus, they often cover other charges and generally are less expensive for people enrolling in Medicare at age 65 than for older enrollees. You get the best deal when you buy a plan during the six months after you enroll in Part B at 65 or older because you can't be rejected or charged more for existing health problems.
But like at work, you may find that you also need to pay for separate dental and vision plans and consider other coverage that you probably didn’t have previously: hearing and long-term care.
Medicare Advantage plans typically operate like health maintenance organizations (HMOs) and preferred provider organizations (PPOs) common with employer-based insurance. The number of Medicare Advantage plans you'll be able to choose from depends on where you live.
To select one, you must be enrolled in Medicare parts A and B. Most plans charge no premium beyond the monthly premium for Part B, but some charge an extra $50 to $100 per month. Average premiums are $18.50 per month in 2024. Plans often include coverage such as dental, hearing, prescription drugs and vision. Some cover other services, such as fitness center memberships or transportation to medical appointments.
What’s more, all of Medicare was designed to make sure medical needs that likely will increase as you age are covered — the reason it was created in 1965. As with any health insurance, you’ll have to decide what features are most important and what limitations you’re willing to live with.