While original Medicare doesn’t pay for some of the care you need, such as most dental, hearing and vision services, it does offer almost universal coverage to adults 65 and older. Fewer than 1 percent were uninsured in 2020, versus more than half before Medicare started paying benefits in 1966. Yet, for 1 in 5 adults of Medicare age, out-of-pocket health care costs in 2021 exceeded $2,000, according to a survey by The Commonwealth Fund.
Here are the expenses that each part of Medicare covers, and how much of the costs you may need to pay yourself.
Premium. Most people don’t pay premiums for Medicare Part A, which covers inpatient stays in hospitals and skilled nursing facilities, some home health services and end-of-life hospice care. You don’t have to pay Part A premiums if you or your spouse had Medicare taxes deducted from your paychecks for at least 40 quarters of work, the equivalent of 10 years or more. The quarters don’t have to be consecutive.
If you don’t qualify for premium-free Part A, you can choose not to buy it. But if you do have to pay, you’ll also need to pay for Part B. The Part A premiums in 2022:
Deductible. You must pay a $1,556 Part A deductible for each benefit period you’re hospitalized in 2022. This benefit period begins when you are admitted to a hospital or skilled nursing facility as an inpatient — that’s an important distinction because so many places also have outpatient centers — and ends when you’ve been out of the hospital or facility for 60 days in a row.
Coinsurance. You may also have to pay a portion of the costs, called coinsurance, if you stay in a hospital or skilled nursing facility for a long time. Medicare covers the first 60 days as an inpatient in the hospital, but in 2022 you have to pay $389 a day for days 61 to 90 and $778 a day for up to 60 lifetime reserve days.
Each lifetime reserve day can be used only once but can apply to different benefit periods. You have to pay all costs beyond 90 days per benefit period if you use up your lifetime reserve days.
If you have a qualifying stay in a skilled nursing facility, Medicare can cover the first 20 days, but you’ll have to pay coinsurance for days 21 to 100, at $194.50 a day in 2022, and all costs beyond day 100.
If you’re receiving end-of-life care through a hospice program, you may have to pay up to $5 per prescription for pain and symptom management and 5 percent of the Medicare-approved amount for respite care.
Medicare Part B helps pay for doctor visits, diagnostic screenings, lab tests, medical equipment, transportation and other outpatient services.
Premiums. Most people pay $170.10 a month in 2022 for Medicare Part B premiums. People who are single with an adjusted gross income of more than $91,000, or married filing jointly with income greater than $182,000, pay a high-income surcharge, with premiums ranging from $238.20 to $578.30 a month, depending on income level.
If you don’t enroll in Medicare when you are first eligible, or qualify for a special enrollment period to sign up later, you also may have to pay a late-enrollment penalty, which is added to your Part B premiums for as long as you have the coverage.
Deductible. You’ll have to pay $233 in 2022 before most Part B coverage begins.
Coinsurance. After paying the deductible, you generally pay 20 percent of the Medicare-approved amount, called coinsurance, for most doctor and outpatient services and for durable medical equipment. Part B covers some preventive services without a deductible or copayments.
Premiums. If you decide to get your Medicare coverage through a private Medicare Advantage plan instead of original Medicare, you still must pay the monthly premiums for Part B — and Part A if you don’t qualify for premium-free part A. Some Medicare Advantage plans also charge an average of $19 a month, although more than half the plans have no additional premium.
Deductibles and copayments. Medicare Advantage plans must provide at least as much coverage as original Medicare, but the deductibles and copayments can be different and vary by plan. All Medicare Advantage plans have an annual cap on out-of-pocket expenses for services covered under Part A and Part B.
The limit for Part C plans in 2022 is $7,550 or less for in-network health services and $11,300 or less for in-network and out-of-network services combined. Some plans have lower spending ceilings.
Most Medicare Advantage plans also provide prescription drug coverage. And many provide some coverage for vision, hearing and dental care too.
Premiums. Medicare doesn’t automatically cover prescription drugs, but you can buy a Part D plan from a private insurer. These plans charge a monthly premium that varies by plan, averaging $33 in 2022. People with higher incomes pay a surcharge that adds $12.40 to $77.90 to their monthly bills. If you don’t sign up for a Part D plan when you’re first eligible, and don’t have other similar drug coverage, you may also have to pay a late-enrollment penalty.
Deductible, copayments, coinsurance. Part D plans can have a deductible of up to $480, and you’ll have copayments or coinsurance for your drugs, based on the plan, the medication and how much you’ve spent so far on prescription drug costs during the year.
These out-of-pocket costs can vary a lot depending on the plan, and also can change from year to year, making it important to compare your options during open enrollment each year. If you have expensive prescriptions, be aware that you could fall into a coverage gap when you and your insurer have paid $4,430 total for your medications in 2022. You’ll stay in the gap until you’ve spent $7,050 from your own pocket and then will pay a nominal amount for each of your drugs.
If you have original Medicare, you may be able to cover many of the out-of-pocket costs for Part A and Part B by buying a Medicare supplemental — or Medigap — policy from a private insurer. Medigap Plan G, for example, covers almost all of Medicare’s deductibles except for the Part B deductible.
But you’ll pay for expenses that Medicare doesn’t cover, such as most dental, hearing and vision care.
If you choose a Medicare Advantage plan instead of original Medicare, the plan may have different copayments and deductibles than Medicare, and its network of doctors and other health care providers usually is limited. But the plan may include some benefits that are not a part of original Medicare, such as dental, hearing and vision care. These benefits come with their own deductibles and copays.
Financial assistance is available at both the federal and state level for those who cannot afford all the costs associated with Medicare.
Updated July 8, 2022
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