Medicare Part A and Part A are two major parts of the basic Medicare program that help millions of Americans manage their healthcare costs. But you’re wondering, “How much is Medicare Part A and Part B?” It can feel overwhelming, especially with regulations, fees and discounts. Here, we’ll break down the costs in a simple, friendly way so you can budget your health care with confidence. Whether you are new to Medicare or need a renewal, this guide will cover everything from premiums to deductibles in an easy-to-understand format.
The Basics: What Are Medicare Part A and Part B?
Before we dive into the costs, let’s briefly look at what each part covers:
- Medicare Part A: Often called “hospital insurance,” Part A covers inpatient hospital stays, skilled nursing facilities, hospice, and some home health care services. Generally, most people qualify for Part A without a premium if they’ve paid Medicare taxes for a certain period.
- Medicare Part B: Known as “medical insurance,” Part B covers outpatient care, doctor’s visits, preventive services, and some home health services. Most people pay a monthly premium for Part B.
With that foundation, let’s explore the costs associated with each part.
How Much Does Medicare Part A Cost?
Most people qualify for premium-free Part A due to their work history or that of a spouse. If you or your spouse have worked and paid Medicare taxes for at least 10 years (40 quarters), you’re likely eligible for this benefit. But if you haven’t met this threshold, you may still enroll in Part A by paying a premium.
- Premiums for Part A: For 2024, if you paid Medicare taxes for less than 30 quarters, the Part A premium is approximately $506 per month. If you paid Medicare taxes for 30 to 39 quarters, you’ll pay about $278 monthly.
- Deductibles and Coinsurance for Part A: Even if you have premium-free Part A, there are still other costs to consider. In 2024, the Part A deductible is $1,632 for each benefit period. This deductible covers the first 60 days of inpatient hospital care. After 60 days, there’s a daily coinsurance amount:
- Days 61–90: $400 per day
- Days 91 and beyond: $800 per “lifetime reserve day” (you have 60 lifetime reserve days over your lifetime)
It’s good to be aware of these costs so there aren’t any surprises if you need inpatient care.
How Much Does Medicare Part B Cost?
While Part A can be premium-free, Medicare Part B typically comes with a monthly premium for all enrollees. This amount can vary based on your income.
- Part B Premiums: In 2024, the standard Part B premium is around $174.70 per month. However, if your income is above a certain level, you may pay a higher amount, known as an Income-Related Monthly Adjustment Amount (IRMAA). The Social Security Administration uses your tax return from two years prior to determine whether you’ll pay an IRMAA.
- Part B Deductibles and Coinsurance: There’s also an annual deductible for Part B, which in 2024 is $233. Once you meet this deductible, Medicare generally covers 80% of your approved medical expenses, leaving you responsible for the remaining 20%.
Income-Related Monthly Adjustment Amount (IRMAA): When You May Pay More
If you’re a higher-income earner, you may have to pay more than the standard premium for Part B. This adjustment is based on your modified adjusted gross income (MAGI) and is determined annually.
For example:
- If you’re an individual earning between $97,000 and $123,000, your monthly premium could be around $238.10.
- For married couples filing jointly with a combined income between $194,000 and $246,000, the premium could be similar.
Understanding this adjustment can help you anticipate any additional costs and plan your healthcare expenses effectively.
Navigating Extra Costs: Deductibles, Coinsurance, and Copayments
While the monthly premiums for Part A and Part B are crucial, deductibles, coinsurance, and copayments can add up quickly. Here’s a step-by-step look at what these mean and how they apply:
- Deductibles: For Part A, the deductible applies to each benefit period, not annually, meaning you could potentially pay it more than once if you have multiple hospital stays in a year. Part B has a single annual deductible.
- Coinsurance: After meeting the Part B deductible, you pay 20% of the Medicare-approved amount for most doctor services, outpatient therapy, and durable medical equipment.
- Copayments: Certain outpatient hospital services under Part B may require copayments, which differ based on the service provided.
Ways to Reduce Out-of-Pocket Costs
Since Medicare Part A and Part B have out-of-pocket costs, here are a few ways you can manage them effectively:
Medigap Plans
Also called Medicare Supplement Insurance, Medigap policies help cover costs that Original Medicare doesn’t, like coinsurance, copayments, and deductibles. Medigap plans are offered by private insurance companies and can be especially helpful if you expect frequent medical visits or extended hospital stays.
Medicare Advantage (Part C)
If you’re looking for an all-in-one alternative to Original Medicare, Medicare Advantage plans include Part A and Part B coverage (and often Part D for prescription drugs) with additional benefits like dental and vision. Keep in mind, though, that these plans come with their own network and rules.
Medicare Savings Programs
These programs assist low-income individuals with Medicare costs. You may qualify for assistance with premiums, deductibles, and coinsurance if you meet the income and asset criteria.
Key Takeaways
So, how much is Medicare Part A and Part B? The costs depend on various factors, including work history, income level, and healthcare needs. If you’re eligible for premium-free Part A, you can save significantly on hospital insurance. For Part B, most enrollees pay a standard premium, though high-income earners may pay more. Additionally, remember that both parts have deductibles, coinsurance, and copayments.
When managing your Medicare expenses, consider additional options like Medigap or Medicare Advantage to cover gaps in Original Medicare. Medicare Savings Programs may also provide financial relief if you qualify.
Read more: What are The 3 Types of Medicare Savings Programs
Conclusion
Navigating the costs of Medicare Part A and Part B might seem complex, but understanding the basics can help you make informed decisions about your healthcare. Knowing how much you’ll pay in premiums, deductibles, and other out-of-pocket expenses ensures that you’re prepared and able to budget accordingly. Remember, whether you’re new to Medicare or just looking for clarity, there are resources and programs available to help you manage these costs. Medicare Part A and Part B offer essential coverage, and knowing what to expect financially will give you peace of mind as you plan your healthcare journey.
