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 2020.
- 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 2020, the Part A premium can cost up to $458 per 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 $1,408 deductible and no coinsurance. Then, on day 61 up to day 90 you pay $352/day coinsurance.
In 2020, most people's Part B premiums cost $144.60 per month. If you are single and you make $87,000 a year or you are married and you make $174,000 or more, your premium is more. You can pay up to $491.60 each month.
Your 2020 deductible is the first $198 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
- 2020 Part D monthly premiums in Massachusetts vary greatly, depending on what plan you choose. The average national premium is $47.59.
- Your plan will set your premium amount.
- Your premium will be higher if you are single and you make $87,000 a year or more, or your are married and together you make $174,000, or more.
Part D plans set their own rates; however, Part D plans cannot charge more than $435 for an annual deductible in 2020.
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 $4,020.
- Once you have used $4,020 in drug costs, but you have not spent $6,350, you are in the “donut hole.” You may have to continue to pay 25% of your drug costs while you are in the “donut hole.”
- After you have spent $6,350, you have reached “catastrophic coverage.” You only have to pay limited costs for the rest of the year. The limits are $3.60 for generic drugs, $8.95 for name-brand drugs, or 5% of any further costs, whichever is higher.