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Cost of Medicare

Medicare costs differ among every plan and insurer, but having a general understanding of what you can expect to pay, can ultimately determine which Medicare plan is right for you. Here is a look at the 2021 costs of Medicare.

2021 Original Medicare Costs

The Part A premium is free for many, but for those who do not have this luxury must pay a premium that is dependent on how long they worked and paid Medicare taxes. If Medicare taxes were paid for less than 30 quarters, an estimated 7.5 years, you will pay a monthly premium of $471. If you paid Medicare taxes between 30 to 39 quarters, an estimated 7.5 to 9.5 years, you will pay a monthly premium of $259.

Part A also has a deductible for each benefit period, which is currently $1,484. A benefit period will start as soon as you are admitted to a hospital or skilled nursing facility as an inpatient. It will then end once you have not received care for at least 60 days in a row. However, if you are admitted as an inpatient after a benefit period has ended, a new benefit period will start and you must pay the deductible again.

The standard monthly Part B premium is $148.50, but it can vary depending on your income. The current annual deductible for Part B is $203.

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Part C and D Costs

The Part C and D costs vary by plan and insurer. For some Part C plans, the premium can be as low as $0, while other Part C monthly premiums average $21. Part C also has an out-of-pocket maximum of $7,550. However, not every Part C plan will have an out-of-pocket limit that reaches the maximum limit. Each plan differs, and some will have a lower limit.

Part D premiums are based on income; a higher income can lead to a higher premium payment. However, the standard premium for Part D is around $30. The annual deductible as of 2021 for Part D is $445, but depending on your plan and the insurer, this deductible can be less. 

When it comes to understanding the costs of Part D, it’s important to understand the four payment stages, which are:

  • Deductible stage: Until you meet the deductible of your Part D plan, you will have to pay the full price of your prescriptions. After the deductible is met, you will move on to the initial stage.
  • Initial stage: In this stage, your Part D plan will begin to help you cover your prescriptions. Your plan will pay for some of the costs while a copayment or coinsurance will be left up to you to pay. For many plans, this stage will end once you and your plan have paid a combined total of $4,130. However, this specific amount can vary across plans.
  • Coverage gap (donut hole): After you and your plan have reached the combined total mentioned above, you will enter the coverage gap, also known as the donut hole. In this period, you will cover 25% of the cost for your prescriptions.
  • Catastrophic coverage: You will reach this specific stage when you have paid a complete total of $6,550 in out-of-pocket costs for your covered prescriptions. You will also pay much lower coinsurance and copayments during this stage.

For more information about the costs of Medicare, reach out to Rothrock Insurance Solutions today. We will help you compare rates for each plan.