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.
Medicare costs go up almost every year. Figures in this article are all for 2018.
- 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 2018, the Part A premium can cost up to $422 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.
For the first 60 days you are in the hospital, you may pay a $1,340 deductible and no coinsurance. Then, on day 61 up to day 90 you pay $335/day coinsurance.
In 2018, most people's Part B premiums cost $134.00 per month. However, some people who get Social Security benefits pay less than this amount, depending in part on what year they first signed up for Medicare Part B. 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 $428.60 each month.
Your 2018 deductible is the first $183 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%.
Part C: Medicare Advantage
If you have a Part C Medicare Advantage plan, you must pay:
- a Part B premium, and
- a Part A premium if you have one, plus
- 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
- 2018 Part D monthly premiums in Massachusetts vary greatly, depending on what plan you choose. The average national premium is $35.02.
- 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 $170,000, or more.
Part D plans set their own rates; however, Part D plans cannot charge more than $405 for an annual deductible in 2018.
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 your drug costs up to $3,750.
- Once you have used $3,750 in drug costs, but you have not spent $5,000, you are in the “donut hole.” You may have to pay 44% of the cost of your generic drugs and 35% of your brand-name drugs while you are in the “donut hole.”
- After you have spent $5,000, you have reached “catastrophic coverage.” You only have to pay limited costs for the rest of the year. The limits are $3.35 for generic drugs, $8.35 for name-brand drugs, or 5% of any further costs, whichever is higher.