What You Should Know About Medicare Costs

Christian Worstell

by Christian Worstell | Published February 18, 2021 | Reviewed by John Krahnert

Original Medicare provides a range of benefits, but there are out-of-pocket costs that are required.

In 2021, the Medicare Part A deductible is $1,484 per benefit period, and the Medicare Part B deductible is $203 per year. Some of the additional expenses associated with Medicare include premiums, coinsurance and copayments.

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Medicare Part A Out-of-Pocket Costs

Original Medicare is the federal health care program that provides health care insurance for people age 65 or older and younger people with certain disabilities or conditions.

The two parts of Original Medicare cover different medical services, and each includes specific costs.

Medicare Part A covers:

  • Hospital care
  • Nursing home care
  • Skilled nursing family care
  • Home health services
  • Hospice care

The Medicare Part A deductible must be met in each benefit period before Medicare begins to cover the costs of your hospital stay. A benefit period starts as soon as you are admitted for inpatient medical care and ends after you have stopped receiving inpatient care for 60 consecutive days.

There is no limit to the number of benefit periods you might experience, and the Part A deductible must be met again in full if you are admitted for inpatient care in a new benefit period.

For hospital stays that last longer than 60 days, you are usually responsible for paying a coinsurance cost after your deductible is met.

In 2021, days 61 through 90 of an inpatient hospital stay require a coinsurance payment of $371 per day, and stays that last longer than 90 days cost a $742 coinsurance payment per day for each lifetime reserve day used.

Most beneficiaries receive Medicare Part A for free (if you paid Medicare taxes for at least 10 years). However, if you must pay a premium for Part A, you could pay up to $471 per month in 2021.

Costs and Benefits of Medicare Part B

Medicare Part B covers:

  • Medically necessary services (like doctor's visits and surgeries) and supplies needed to diagnose or treat an illness or condition
  • Services to prevent or detect an illness or a condition at an early stage

In 2021, this standard premium is $148.50 per month. You may have to pay more, depending on your income.

In addition to the monthly premium and annual deductible, you typically pay a copayment of 20% of the Medicare-approved amount for doctor services, outpatient therapy and medical equipment such as canes and wheelchairs.

If your health care provider is not a participating Medicare physician, you could be responsible for paying Medicare Part B excess charges. Depending on the types of services you need, these out-of-pocket costs could add up quickly.

Medicare Supplement Insurance Helps Pay For Certain Costs

Medigap, also known as Medicare Supplement Insurance, helps cover some of the out-of-pocket costs associated Original Medicare. There are 10 standardized Medigap plans that are sold by private insurers in most states, and each type of plan can help pay for different costs, such as Medicare Part A coinsurance and Part B coinsurance.

The cost and availability of Medicare Supplement Insurance plans can vary by state. But because the plans are standardized, you can expect the same basic benefits no matter where you live. For example, Plan A sold by a company in one state will have the same basic benefits as Plan A sold by a different company in another state.

Compare all 10 standardized Medigap plans using the chart below.

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Medicare Supplement Benefits

Part A coinsurance and hospital coverage

Part B coinsurance or copayment

Part A hospice care coinsurance or copayment

First 3 pints of blood

Skilled nursing facility coinsurance

Part A deductible

Part B deductible

Part B excess charges

Foreign travel emergency

A B C* D F1* G1 K2 L3 M N4
50% 75%
50% 75%
50% 75%
50% 75%
50% 75% 50%
80% 80% 80% 80% 80% 80%

* Plan F and Plan C are not available to Medicare beneficiaries who became eligible for Medicare on or after January 1, 2020. If you became eligible for Medicare before 2020, you may still be able to enroll in Plan F or Plan C as long as they are available in your area.

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1 Plans F and G offer high-deductible plans that each have an annual deductible of $2,370 in 2021. Once the annual deductible is met, the plan pays 100% of covered services for the rest of the year. The high-deductible Plan F is not available to new beneficiaries who became eligible for Medicare on or after January 1, 2020.

2 Plan K has an out-of-pocket yearly limit of $6,220 in 2021. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.

3 Plan L has an out-of-pocket yearly limit of $3,110 in 2021. After you pay the out-of-pocket yearly limit and yearly Part B deductible, it pays 100% of covered services for the rest of the calendar year.

4 Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to $50 copayment for emergency room visits that don’t result in an inpatient admission.

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Connect with a licensed insurance agent at 1-800-995-4219 to find out how a Medicare Supplement Insurance plan can help cover some of your out-of-pocket Medicare costs.

To learn more about Medicare costs, read through our guide, How Much Will You Pay for Medicare Part B?

Resource Center

Compare Medigap Plans 2021

See how the 10 Medigap plans differ. Review our chart for a detailed comparison of Medicare Supplement insurance benefits and compare Medigap options where you live. Read more
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