When you turn 65, you are eligible for the Medicare program, a relief to retirees losing employer-sponsored health insurance plans. However, Medicare coverage comes with costs that may include premiums, coinsurance and copayments. Each part of Medicare has a cost-sharing component.
What does Part A (hospital insurance) cost?
At age 65, if you or a spouse paid taxes into the Medicare system for the required duration, usually 10 years, you are eligible for Part A with no premium. Check your Social Security account online to confirm your status. If premium-free Part A does not apply, you may be able to pay for the coverage. The monthly premium ($278 or $505 in 2024) varies with the duration of time worked and Medicare taxes paid.
If you need inpatient hospital care, the Part A deductible ($1632 in 2024) applies for each benefit period. There is no ceiling on the number of benefit periods you can have in a calendar year. Each benefit period begins on the day of admittance and ends when 60 consecutive days have elapsed without inpatient hospital care.
Inpatient care in a skilled nursing facility (SNF) does not require a deductible, and you don’t have to pay a copayment unless you stay beyond 20 days. The copayment ($204 per day in 2024) applies to days 21 through 100. You are responsible for all costs as of day 101. The cost applies to each benefit period, which begins when you are admitted and ends after 100 consecutive days without SNF inpatient care.
What does Part B (medical insurance) cost when I turn 65?
The standard Part B monthly premium is $174.70 in 2024. Your premium may increase with an Income Related Monthly Adjustment Amount (IRMAA) if your modified gross income exceeds an established threshold ($103,000 for individuals and $206,000 for married people filing jointly in 2024).
Unlike Part A, the deductible for Part B is per calendar year ($240 for 2024). Your Part B deductible may not apply for some benefits under Part B, such as most preventive services.
The standard coinsurance for Part B services and durable medical equipment is 20% of the amount Medicare approves for the services or supplies. Medicare-participating providers should accept assignment, meaning they bill Medicare directly and accept the Medicare payment. Providers who do accept assignment do not charge the patient more than the Medicare-required cost-sharing amount. Use doctors and suppliers who accept assignment to keep your costs down.
Other Medicare plans
Some private insurers sell Medicare-approved plans to beneficiaries enrolled in Parts A and B. Part D is the prescription drug plan. Part C is Medicare Advantage, which bundles Parts A, B and usually D. Medigap is insurance that supplements Original Medicare and picks up many out-of-pocket expenses.
Private carriers set premiums based on location and the specific type of plan. You can research Medicare policies in your area by navigating online plan comparison sites or contacting a knowledgeable, licensed insurance agent. An agent can provide personalized guidance to help you identify an affordable policy that meets your needs.
In the last quarter of each calendar year, a new version of the Medicare handbook, Medicare & You, is available online and by mail. The publication includes benefits effective the following year. Access updated cost information from the Medicare website. Other Medicare plans, such as Medicare Advantage and Medigap, distribute an annual notice of all changes directly to plan members.
Beneficiaries can change coverage during the annual Open Enrollment Period, October 15 through December 7. Medicare Advantage members have an additional opportunity to make a plan change during the Medicare Advantage Open Enrollment Period, January 1 through March 31.