Q: What does Original Medicare cost the beneficiary?
A: Medicare Part A (hospital insurance) is free for most seniors. If you or your spouse worked at least 10 years in a job where you paid Medicare taxes, you’re eligible for free Medicare Part A when you turn 65.
Medicare A is also free for people under 65 who have been on Social Security disability for at least two years, or who have end-stage renal disease.
Medicare Part B has a premium for all enrollees (unless you’re dual-eligible for Medicare and Medicaid, in which case the Part B premium can be paid by your state’s Medicaid program). The premiums are higher for people who earn at least $85,000 per year.
Medicare Parts A and B both have deductibles and coinsurance that are charged if and when the beneficiary receives medical services. Most people who have Original Medicare also have some sort of supplemental coverage — either from an employer or retiree plan or Medicaid, or from privately purchased Medigap plans — which help to pay some or all of the out-of-pocket deductible and coinsurance costs.
Most Medicare beneficiaries also have private Medicare Part D coverage for prescription drugs, either as a stand-alone plan or as part of a Medicare Advantage plan. If you purchase supplemental coverage, the premiums will be in addition to the Part B premiums (and if applicable, the Part A premiums).
Part A costs
Although most Medicare beneficiaries receive Part A with no premium, if you do have to pay for it, the premium in 2019 is $437 per month if you worked less than 7.5 years, and $240 per month if you worked between 7.5 and 10 years. These amounts are projected to be $460 and $253, respectively, in 2020, although the official numbers will be published by CMS in the fall of 2019.
If you’re hospitalized, Medicare Part A has a deductible of $1,364 in 2019 (per benefit period). This is projected to grow to $1,420 in 2020, but again, the official number will be published by CMS in the fall of 2019. There is also a coinsurance amount that is charged on a per-day basis after a patient has spent 60 days in the hospital during a single benefit period; the coinsurance amounts will increase for 2020 as well.
[Medicare Advantage plans can have different plan designs in terms of cost-sharing, so the deductible and coinsurance for Medicare Part A isn’t the same as the out-of-pocket costs that a beneficiary pays if they’re hospitalized while enrolled in a Medicare Advantage plan.]
Part B costs
Medicare Part B has a standard monthly premium of $135.50 in 2019, for people who earn up to $85,000 a year ($170,000 for a married couple). The premiums are higher if your income exceeds that amount. Part B enrollees pay an annual deductible of $185 in 2019. The standard premium for Part B is projected to be $144.30 in 2020 and the deductible is projected to be $197, although the official numbers will be published by CMS in the fall of 2019; the standard premium for most enrollees also depends on the Social Security cost of living adjustment, which will be published in October 2019.
Some Medigap plans pay the Part B deductible. For people who become eligible for Medicare on or after January 1, 2020, Medigap plans that cover the Part B deductible will no longer be available, but people who become eligible for Medicare before that date can continue to have coverage under Medigap Plans C or F, both of which cover the Part B deductible.
[As noted above, Medicare Advantage plans can have different plan designs in terms of cost-sharing, so the out-of-pocket costs that an enrollee will pay for outpatient care will be different if they’re enrolled in a Medicare Advantage plan.]