Nothing in life is completely free, and that’s true for Medicare.
In this guide, we’ll take a detailed look at the out-of-pocket costs for Medicare beneficiaries and show you a few ways you may be able to get coverage for some of these costs.
*All costs listed are for 2021 unless otherwise noted.
Premiums exist for each part of Medicare. Premiums are typically paid monthly, but in some cases, they may be paid quarterly or yearly.
Most people receive “premium-free Part A” thanks to paying a sufficient amount of Medicare taxes during their working years.
The standard Medicare Part B premium is $148.50 per month. However, the Part B premium is based on your reported taxable income from two years prior.
The table below shows what Part B beneficiaries will pay for their premiums in 2021, based off their 2019 reported income.
2019 Individual tax return | 2019 Joint tax return | 2019 Married and separate tax return | 2021 Part B monthly premium |
---|---|---|---|
$88,000 or less |
$176,000 or less |
$88,000 or less |
$148.50 |
More than $88,000 and up to $111,000 |
More than $176,000 and up to $222,000 |
N/A |
$207.90 |
More than $111,000 up to $138,000 |
More than $222,000 up to $276,000 |
N/A |
$297.00 |
More than $138,000 up to $165,000 |
More than $276,000 up to $330,000 |
N/A |
$386.10 |
More than $165,000 up to $500,000 |
More than $330,000 up to $750,000 |
More than $88,000 up to $412,000 |
$475.20 |
More than or equal to $500,000 |
More than or equal to $750,000 |
More than or equal to $412,000 |
$504.90 |
Medicare Advantage plans are sold by private insurance companies, so premium costs can differ according to plan type, provider and location.
In 2021, the average monthly premium for a Medicare Advantage plan that includes prescription drug coverage is $33.57 per month.1
Some Medicare Advantage plans may offer $0 premiums.
Find $0 premium Medicare Advantage plans in your area
Compare PlansOr call TTY Users: 711 to speak with a licensed insurance agent. We accept calls 24/7!
Medicare Part D plans are also sold by private insurance companies, so plan premiums may vary across the board. The average monthly Part D premium in 2021 is $41.64.1
Part D premiums also come with an income-based tier system that uses your reported income from two years prior, similar to how Medicare Part B premiums are calculated.
Part D premiums for 2021 will be based on reported taxable income from 2019, and the breakdown is as follows:
2019 Individual tax return | 2019 Joint tax return | 2019 Married and separate tax return | 2021 Part D monthly premium |
---|---|---|---|
$88,000 or less |
$176,000 or less |
$88,000 or less |
Your plan premium |
More than $88,000 and up to $111,000 |
More than $176,000 and up to $222,000 |
N/A |
$12.30 + your plan premium |
More than $111,000 up to $138,000 |
More than $222,000 up to $276,000 |
N/A |
$31.80 + your plan premium |
More than $138,000 up to $165,000 |
More than $276,000 up to $330,000 |
N/A |
$51.20 + your plan premium |
More than $165,000 up to $500,000 |
More than $330,000 up to $750,000 |
More than $88,000 up to $412,000 |
$70.70 + your plan premium |
More than or equal to $500,000 |
More than or equal to $750,000 |
More than or equal to $412,000 |
$77.10 + your plan premium |
You can compare Part D plans available where you live and enroll in a Medicare prescription drug plan online in as little as 10 minutes when you visit MyRxPlans.com.2
A Medicare deductible is the amount you must pay for health care services (excluding premiums) before your coverage begins to kick in.
Part A requires beneficiaries to meet a $1,484 deductible for each benefit period before coverage takes effect.
A benefit period begins the day you are admitted to a hospital or other long-term care facility for inpatient care, and it ends 60 days after being discharged from the facility (if you have not been readmitted during that time).
The Part A deductible can reset more than one time during a calendar year if you were to experience multiple inpatient stays.
Medicare Part B requires an annual deductible of $203.
Deductibles for Medicare Advantage plans will differ by plan. Plans that offer prescription drug coverage may have a separate deductible for drug coverage and another deductible for the plan’s other benefits.
Not all Medicare Advantage plans include a deductible.
Deductibles vary according to plan. However, Part D deductibles are not allowed to exceed $455 in 2021, and many Part D plans do not have a deductible at all.
The average Part D deductible in 2021 is $342.97.1
Once you meet your deductible, you may have to pay coinsurance or copayments when you receive care. A coinsurance is a percentage of the total bill, while a copayment is a flat fee.
For an extended stay in a hospital or mental health facility, a copayment of $371 per day is required for days 61-90 of your stay, and $742 per “lifetime reserve day” thereafter.
You have 60 lifetime reserve days to use. Once these reserve days are exhausted, you will be responsible for all costs.
At a skilled nursing facility, a copayment of $185.50 per day is required for days 21-100 of an inpatient stay, and you are responsible for all costs thereafter.
During hospice care, copayments of no more than $5 are required for drugs and other products used for pain relief or symptom control. A 5 percent coinsurance payment is also required for inpatient respite care.
For durable medical equipment used for home health care, a 20 percent coinsurance payment is required.
After the Part B deductible is met, you will typically be required to pay up to 20 percent of the Medicare-approved amount for covered services or products.
Coinsurance and copayments will vary according to each plan.
As with Medicare Advantage plans, coinsurance and copayments will vary according to each Part D plan.
Medicare beneficiaries aren’t always done paying out-of-pocket costs after premiums, deductibles and coinsurance or copayments are paid.
Some additional out-of-pocket expenses that can be incurred with Medicare include:
It’s also worth noting that Original Medicare does not include an annual out-of-pocket spending limit, which means beneficiaries could potentially pay a limitless amount of costs in a year.
Fortunately, there are some ways you may be able to get coverage for some of your out-of-pocket Medicare costs.
Read additional medicare costs guides to learn more about Medicare costs and how they will affect you.
If you have any additional Medicare questions or are interested in a Medicare Advantage plan that could help you save on some Medicare out-of-pocket costs, you can call to speak with a licensed insurance today.
Compare Medicare Advantage plans in your area
Compare PlansOr call TTY Users: 711 to speak with a licensed insurance agent. We accept calls 24/7!
1 MedicareAdvantage.com's The Best States for Medicare in 2021 report. (Oct. 27, 2020).
2 10-minute claim is based solely on the time to complete the e-application if you have your Medicare card and other pertinent information available when you apply. The time to shop for plans, compare rates, and estimate drug costs is not factored into the claim. Application time could be longer. Actual time to enroll will depend on the consumer and their plan comparison needs.
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