Medicare Costs for 2020 Simplified:
How much does Medicare cost? This is a very common question and a very important one to ask. While most will pay the same for Medicare, others may have different costs for different reasons.
To make it easy, we have broken the costs down in the chart below for Parts A and B.
The costs for Medicare Part D, Medicare Advantage, and Medicare Supplements will all vary for many different reasons. Continue reading below for a breakdown of these costs.
Medicare Cost In Depth:
Medicare Part A in 2020
Medicare Part A for most people usually is premium free, or $0 premium. As long as you or your spouse has worked 10+years (40 quarters) in the U.S., you qualify for free Part A. During this time you will have paid your Medicare taxes and in turn, paid for Part A. Nearly everyone eligible for Medicare has done this.
If you or your spouse has not worked for this time and have to buy Part A. The cost for Medicare Part A in 2020 will be $458/month. PIf you have worked less than 40 quarters but more than 30 quarters, you can get a pro-rated premium of $252/month.
You must have been a legal resident or have had a green card for at least 5 years.
Once you have Medicare Part A, you will have cost sharing if you are admitted as an inpatient.
- $1,408 deductible for each benefit period
- Days 1-60: $0 coinsurance for each benefit period
- Days 61-90: $352 coinsurance per day of each benefit period
- Days 91 and beyond: $704 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
- Beyond lifetime reserve days: All costs
Medicare Cost for Part B in 2020
Medicare Part B premiums are based upon your modified adjusted household gross (MAGI) income from 2 years prior. The Social Security office will pull your IRS tax return from two years prior and use this to determine what your monthly premiums for Parts B.
Your filing status does affect how your premiums are calculated. For example, if you filed jointly, Social Security will use this to set you and your spouse’s Medicare Premiums INDIVIDUALLY. So, you will EACH pay your own Part B premium separately as Medicare is individual. You must continue to pay this premium to receive benefits. Social Security will usually notify you of your next year’s premium annually in December or early January by mail.
Medicare premiums are calculated on a sliding scale based on income and only about 5% of all Medicare beneficiaries currently pay higher Medicare premiums. See the chart below to see how Medicare premiums are calculated in 2020.
Take a closer look at what Part B covers and costs here.
Medicare Cost for Part D for 2020
Like Medicare Part B, your monthly premiums for Part D can vary based on income. Also, you have to purchase your part D plan from a private insurance company as a stand alone plan or get your Part D from a Medicare Advantage plan. So you will pay a premium for these plans, and you may have to pay extra straight to Medicare if you are a higher earner. Plans and premiums do vary by area and there can often be dozens of options with ranging premiums.
For most, you will just need to pay the stated premium of your Part D plan. Take a look at the Part D premium chart for 2020 below to see if you will pay more for Part D.
You can learn more about Medicare Part D coverage and costs here.
How to pay for Medicare?
If you have signed up for Social Security income benefits, your Medicare premiums will be deducted from Social Security payments monthly.
If you have not taken your Social Security income benefits, Medicare will bill you quarterly.
How to lower your out of pocket costs?
With Medicare there is 2 options to help lower your out of pocket cost responsibilities for Part A and Part B.
The first and most common is a Medicare Supplement plan. The Medicare Supplement helps pay the deductibles and coinsurance that you are left with traditional Medicare. You get Medicare Supplements from private insurance companies that you pay a monthly premium for. For help selecting the correct Medicare Supplement we strongly advise working with an agent to get one that fits your needs and budget.
Find out more about Medicare Supplements here.
The second option, and rapidly growing in popularity, is Medicare Advantage. Medicare Advantage plans are plans offered by private insurance companies and regulated by the federal government to offer an alternative to Medicare. These plans are usually HMO and PPO options that require you to use a set network to receive your care. Medicare Advantage plans are often the lower cost alternative to Medicare and Medicare Supplements and often offer coverage for services Medicare usually does not cover. These can include vision, dental, hearing, transportation, fitness memberships and much more. Medicare Advantage plans differ from area to area. For help selecting the correct Medicare Advantage we strongly advise working with an agent to get one that fits your needs and budget.
Find out more about Medicare Advantage here.
How Much Will Medicare Cost YOU?
Still have questions or need assistance with calculating your Medicare costs? You are not alone, AHIC is here to help. If you would like someone to walk you through the process of calculating your costs for Medicare, shopping for a plan, then please click on the link below. Our services are at NO COST to you and we will be here to help you for the lifetime of your policy.