How to Calculate Out of Pocket Medicare Costs
How to Calculate Out-of-Pocket Medicare Costs
You may think that when you enroll in Medicare, the federal government health insurance program will pay for everything related to your health care. Tallying how much you pay out of pocket for Medicare each year can lead to serious sticker shock. When you add up all the premiums, deductibles, copays and coinsurance, the average Medicare enrollee can expect to spend thousands of dollars a year to get medical care. And the tab can swing wildly each year, depending on the state of a beneficiary’s health, where he or she lives, and whether the government and insurers have instituted any price increases — or decreases. Individual plans can also tinker with the services and drugs they cover.
Part B: $170.10 monthly for 2022 (automatically deducted from Social Security benefit payments). Individuals with an annual income of more than $91,000 pay a higher premium.
Part C (Medicare Advantage): $170.10 monthly for the Part B premium for 2022, plus any additional premium set by the insurer.
Part D prescription drug plan: Premium varies by plan, averages $31.47 monthly for 2022.
Medigap: Amount varies by plan and extent of coverage.
*A small number of beneficiaries (who didn’t pay enough Medicare taxes during their working years) must pay a $499 monthly premium. of
The Qualifying Individual (QI) program only helps pay for Part B premiums, not the Part A premium or other cost sharing. If your income is too high for QMB and SLMB, you might qualify for QI. To get help from this program, you must reapply for benefits every year. Funding is limited, so these benefits are first come, first served. Priority is given to individuals who received help through this program the previous year.
The Qualified Disabled and Working Individuals (QDWI) program only helps pay for Part A premiums. This program is designed for individuals with disabilities, under 65, who are currently working. Your state Medicaid program or — also known as SHIP (877-839-2675) — can provide enrollment assistance and more details on the income caps and other eligibility criteria. Editor’s note: This story has been updated with 2022 information. Dena Bunis covers Medicare, health care, health policy and Congress. She also writes the “Medicare Made Easy” column for the AARP Bulletin. An award-winning journalist, Bunis spent decades working for metropolitan daily newspapers, including as Washington bureau chief for the Orange County Register and as a health policy and workplace writer for Newsday.
How Much Does Medicare Cost
Monthly premiums other out-of-pocket expenses can add up
Getty ImagesNeed Help With Medicare
You may think that when you enroll in Medicare, the federal government health insurance program will pay for everything related to your health care. Tallying how much you pay out of pocket for Medicare each year can lead to serious sticker shock. When you add up all the premiums, deductibles, copays and coinsurance, the average Medicare enrollee can expect to spend thousands of dollars a year to get medical care. And the tab can swing wildly each year, depending on the state of a beneficiary’s health, where he or she lives, and whether the government and insurers have instituted any price increases — or decreases. Individual plans can also tinker with the services and drugs they cover.
Medicare s price tag deciphered
Medicare covers the majority of your health care expenses each year. But you still may have to pay thousands of dollars in out-of-pocket costs: of2022 Premiums
Part A: No fee for the majority of beneficiaries*Part B: $170.10 monthly for 2022 (automatically deducted from Social Security benefit payments). Individuals with an annual income of more than $91,000 pay a higher premium.
Part C (Medicare Advantage): $170.10 monthly for the Part B premium for 2022, plus any additional premium set by the insurer.
Part D prescription drug plan: Premium varies by plan, averages $31.47 monthly for 2022.
Medigap: Amount varies by plan and extent of coverage.
*A small number of beneficiaries (who didn’t pay enough Medicare taxes during their working years) must pay a $499 monthly premium. of
2022 Deductibles
Part A: $1,556 for each hospital stay in 2022. Part B: $233 for 2022 (Some Medigap policies cover Part A and Part B deductibles.) Part C (Medicare Advantage): Amount varies by plan. Part D prescription drug plan: Amount varies by plan but cannot exceed $480 for 2022. ofCopays
Part C (Medicare Advantage): Amount varies by plan and by service. Part D prescription drug plan: Amount varies by plan and by prescription.Coinsurance
Part A: No fee for hospital stays of 60 days or less. For 61 to 90 days, $389 per day for 2022. For 91 days or more, $778 per day or full cost of stay. Medicare also provides 60 “lifetime reserve days” that beneficiaries can use if they need to stay in a hospital for more than 90 days. These can only be used once. Part B: Typically, 20 percent of the Medicare-approved cost of the service for most services (Medigap policies typically cover Part A and Part B coinsurance.) Part C (Medicare Advantage): Amount varies by plan and by service.Need help affording Medicare
Medicare’s out-of-pocket costs — premiums, deductibles, copays and coinsurance — can easily result in a large tab each year. If you’re struggling to meet those expenses, you might be eligible for federal and state assistance. If you qualify for Medicaid, the federal-state health insurance program for people with low incomes and individuals with disabilities, it will pay some or all of your out-of-pocket expenses. Individuals on both Medicare and Medicaid are known as “dual eligibles.” Other programs are designed for beneficiaries with incomes that are too high to qualify for Medicaid but who still have trouble paying their health care bills. Each program has specific income and asset limits and eligibility requirements that are adjusted annually. The Qualified Medicare Beneficiary (QMB) program helps pay for Part A and Part B premiums as well as deductibles, coinsurance and copays. If you qualify for this program, you automatically qualify for the Extra Help prescription drug program to help you with the out-of-pocket costs of your medicines. This program has the lowest income threshold of the four.Coronavirus testing br
Medicare will pay for beneficiares to get vaccinated – including getting boosters – for COVID-19 with no out-of-pocket expenses. The program will also pay for beneficiares to get tested with charges to the beneficiary. During the coronavirus, deductibles and copays for people on Original Medicare and those who have Medicare Advantage plans also will be waived for medical services related to vaccination and testing, such as going to the doctor or hospital emergency room to see if they need to be tested. If you cannot leave your home, Medicare will allow your doctor to order a test to be brought to you and administered there. The Specified Low-Income Medicare Beneficiary (SLMB) program helps pay only for Part B premiums, not the Part A premium or other cost sharing. If your income is too high to qualify for the QMB program, you might qualify for this one. You also automatically qualify for Extra Help for prescription drugs. The Extra Help program is designed to help people with limited resources pay for Part D prescription drug plan premiums, deductibles and copays. You can apply through the Social Security Administration.The Qualifying Individual (QI) program only helps pay for Part B premiums, not the Part A premium or other cost sharing. If your income is too high for QMB and SLMB, you might qualify for QI. To get help from this program, you must reapply for benefits every year. Funding is limited, so these benefits are first come, first served. Priority is given to individuals who received help through this program the previous year.
The Qualified Disabled and Working Individuals (QDWI) program only helps pay for Part A premiums. This program is designed for individuals with disabilities, under 65, who are currently working. Your state Medicaid program or — also known as SHIP (877-839-2675) — can provide enrollment assistance and more details on the income caps and other eligibility criteria. Editor’s note: This story has been updated with 2022 information. Dena Bunis covers Medicare, health care, health policy and Congress. She also writes the “Medicare Made Easy” column for the AARP Bulletin. An award-winning journalist, Bunis spent decades working for metropolitan daily newspapers, including as Washington bureau chief for the Orange County Register and as a health policy and workplace writer for Newsday.