How much does Medicare cost?

The different Medicare parts each have different costs:

• Premiums are a regular, insurance payment. Most people pay their premiums monthly and the amount stays the same from month to month;
• Deductibles are the amount of money you pay towards medical bills before Medicare starts to help pay;
• Copayments are a share of each medical bill;
• Coinsurance is the amount you may have to share with Medicare after you have paid your deductible. Medicare pays a percent and you pay a percent. Your percent is called coinsurance.

Note

Medicare costs go up almost every year. Figures in this article are all for 2011.

Part A: Hospital insurance

Premiums

• If you or your spouse worked and paid into the Medicare system for at least ten years, Part A has no monthly premium.
• If you get Social Security Retirement benefits or Railroad Retirement benefits, Part A has no monthly premium.
• If neither you nor your spouse paid into the system for at least ten years, you must pay a monthly Part A premium. In 2011, the Part A premium can cost between $248 and $450 a month. The cost of your premium depends on how long you worked and how long you paid into the system.

Deductibles, co-payments and coinsurance

The other expenses under Medicare Part A are different if go to a hospital, hospice, skilled nursing facility, or you get home health care.

Example

For the first 60 days you are in the hospital, you may pay a $1,132 deductible and no coinsurance. Then, on day 61 up to day 90 you pay $283/day coinsurance.

Part B: Supplementary Medical Insurance

Premiums

In 2011, Part B premiums cost between $96.40 and $115.40 per month, depending on what year you first enrolled in Medicare. If you are single and you make $85,000 a year or you are married and you make $170,000 or more, your premium is more. You can pay up to $369.10 each month.

Deductibles

Your deductible is the first $162 each year for Part B-covered services or items.

Copayments and coinsurance

For Part B services Medicare generally pays 80% of the bill and you pay the rest - 20%.

In 2011, Medicare generally pays 55% of your mental health services bill, and you pay the rest - 45%.

Part C: Medicare Advantage

If you have a Part C Medicare Advantage plan, you must pay:

1. a Part B premium, and
2. a Part A premium if you have one, plus
3. any premium that your Part C plan charges for extra coverage.

Your Part C plan will also determine the deductible, coinsurance, and copayment rates.

Part D: Prescription Drug Insurance

Premiums

• 2011 Part D monthly premiums in Massachusetts range between $14.80 and $120.10. The average national premium is $32.34.
• Your plan will set your premium amount.
• Your premium will be higher if you are single and you make $85,000 a year or more, or your are married and together you make $170,00, or more.

Deductibles

Part D plans set their own rates; but, Part D plans cannot charge more than $310 for an annual deductible.

Coinsurance and copayments

• Part D plans set their own coinsurance and copayment rates.
• After you pay your deductible, you may have to pay up to 25% of any other drug costs up to $2,840.
• Once you have spent $2,840 on drugs, but you have not spent $4,550, you are in the “donut hole.” You may have to pay 93% of the cost of your generic drugs and 50% of your brand-name drugs while you are in the “donut hole.”
• After you have spent $4,550, you have reached “catastrophic coverage.” You only have to pay limited costs for the rest of the year. The limits are $2.50 for generic drugs, $6.30 for name-brand drugs, or 5% of any further costs, whichever is higher.