Navigating Medicare can seem daunting, especially when it comes to understanding the costs associated with Medicare Parts A and B. These two parts of Medicare cover hospital insurance and medical insurance, respectively, and knowing what to expect in terms of costs can help you better manage your healthcare budget.
To help you navigate these options and find the best plan for your needs, we’ve teamed up with Chapter to provide personalized, 1-1 guidance.
Medicare Part A: Hospital Insurance Costs
Medicare Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. One of the most appealing aspects of Medicare Part A is that many people qualify for premium-free coverage. If you or your spouse paid Medicare taxes while working for at least 10 years (40 quarters), you likely won’t have to pay a monthly premium for Part A.
However, if you haven’t met the required work history, you may need to pay a premium. As of 2024, the standard Part A premium can range from $278 to $505 per month, depending on how long you or your spouse worked and paid Medicare taxes. For more details, see Humana’s Medicare overview.
Beyond premiums, there are other costs associated with Part A. For instance, you’ll need to pay a deductible before Medicare begins to cover your hospital expenses. In 2024, this deductible is $1,632 for each benefit period, which begins the day you’re admitted to the hospital and ends when you haven’t received inpatient care for 60 days in a row. Visit CMS’s Fact Sheet for the latest cost details.
Additionally, if your hospital stay extends beyond 60 days, you’ll start paying coinsurance. For days 61 to 90, you’ll owe $408 per day, and after 90 days, you’ll use what are called “lifetime reserve days,” which come with a $816 per day coinsurance. Once these reserve days are used up, you’re responsible for all costs. More about these costs can be found at Medicare.gov.
Medicare Part B: Medical Insurance Costs
Medicare Part B covers outpatient care, preventive services, doctor visits, and some home health services. Unlike Part A, everyone pays a premium for Part B. The standard monthly premium for Part B in 2024 is $174.70, though it can be higher based on your income. Higher-income beneficiaries might pay an Income-Related Monthly Adjustment Amount (IRMAA), which could raise your premium significantly. You can explore income-adjusted premiums in more detail at the Social Security Administration’s website.
The IRMAA can increase the Part B premium significantly for those with higher incomes, ranging from $244.60 to $594 depending on income levels. In addition to the monthly premium, there’s an annual deductible for Part B, which in 2024 is $240. After meeting this deductible, you typically pay 20% of the Medicare-approved amount for most doctor services, outpatient therapy, and durable medical equipment.
It’s important to note that unlike Medicare Part A, there’s no maximum out-of-pocket limit for Part B, meaning your costs could add up depending on the services you need. More about these out-of-pocket costs is available on the American Hospital Association’s Medicare page.
To help you navigate these options and find the best plan for your needs, we’ve teamed up with Chapter to provide personalized, 1-1 guidance.
Managing Your Costs
Understanding these costs is crucial for budgeting your healthcare expenses. One way to manage your out-of-pocket costs is by considering supplemental insurance, like a Medigap policy, which can help cover some of the costs not paid by Medicare. Alternatively, some people choose Medicare Advantage plans, which are offered by private insurers and may provide additional coverage, including out-of-pocket maximums, potentially lowering your overall costs.
It’s also wise to regularly review your income and financial situation to see if you qualify for programs that can assist with Medicare costs. For example, the Medicare Savings Programs (MSPs) are state-administered initiatives designed to help individuals with limited income and resources pay for Medicare costs. These programs can cover premiums, deductibles, coinsurance, and copayments associated with Medicare. You can find more about these savings programs on the Medicare.gov page.
Final Thoughts
Navigating the costs of Medicare Parts A and B can be complex, but understanding the basics can empower you to make informed decisions about your healthcare. Regularly reviewing your coverage and considering supplemental options can help you manage your healthcare expenses effectively.
To gain a deeper understanding of how Medicare Parts A and B work, including ways to reduce your out-of-pocket costs, consider taking a Medicare class on GetSetUp. These classes are designed to help you navigate your Medicare benefits with confidence.
Reviewed By: Keith Gilbert