The United States national health insurance program known as Medicare has been providing people with health care insurance coverage since 1966. Today, Medicare provides this coverage for over 64 million beneficiaries, most of whom are 65 years and older.
The U.S. government has set the age of eligibility for Original Medicare Parts A and B at 65. And, while most people enroll at this age, others continue working and choose to stay on their employer’s insurance plan until the time they retire.
If your 65th birthday is coming up and you are planning to enroll for your Medicare benefits, you may be wondering what your costs will be. Here is a look at what you pay for Medicare insurance at the age of 65.
What Medicare costs do you have at age 65?
The four parts of Medicare have their own premiums, deductibles, copays, and/or coinsurance costs. Here is a look at each part separately to see what your costs may be at age 65.
• Part A
If you are not receiving Social Security benefits three months before your 65th birthday, you must sign up for Part A (and Part B if you choose this option) during your initial enrollment period which lasts for a period of seven months based on your 65th birth month.
There is no monthly premium for Part A if you meet the following requirements for premium-free Part A:
• You are currently receiving retirement benefits from either the SSA or the RRB.
• You have not applied for SS or RRB benefits yet, but you are eligible for them.
• You or your spouse were covered by Medicare through employment.
You are eligible for Medicare and premium-free Part A, if you or your spouse paid federal taxes for 40 quarters. If you do not have 40 quarters, you may be eligible to purchase Part A coverage. This costs $458.00 per month if you have less than 30 quarters. If you paid federal taxes for 30 – 39 quarters, the monthly premium for Part A is $252.00.
If you purchase Part A, you may have to also purchase Part B and pay the premiums for both parts.
As of 2020, your Part A deductible for hospital stays is $1408.00 for each benefit period.
After you meet your Part A deductible, your coinsurance costs are as follows:
• Days 1 – 60: $0 coinsurance per benefit period
• Days 61 – 90: $352.00 coinsurance per day, per benefit period
• Days 91 and up: $704.00 coinsurance per lifetime reserve days remaining after 90 per benefit period
• After lifetime reserve days end: 100 percent of costs
• Part B
Medicare Part B has a monthly premium. The amount you pay depends on your yearly income. Most people pay the standard premium amount of $144.60 (as of 2020) because their individual income is less than $87,000.00, or their joint income is less than $174,000.00 per year.
Deductibles for Medicare Part B benefits are $198.00 as of 2020 and you pay this once a year. You must pay it before Medicare pays your health care expenses.
After your deductible is paid, you pay a coinsurance of 20 percent of the Medicare-approved amount for most services either as an outpatient, inpatient, for outpatient therapy, and durable medical equipment.
• Part C
Medicare Part C is Managed Medicare or Medicare Advantage. These policies are sold by private insurance companies. Part C covers everything that Original Medicare Parts A and B cover plus some additional coverage. Most plans include prescription drug coverage too.
The amount you pay for your monthly premium depends on the coverage it has and the state where you live. On average, MA plan premiums range between $0 to $400.00 per month.
Your MA plan provider may charge either a copay or coinsurance. You may also have a deductible which may mean you do not have to pay your Original Medicare Part B deductible.
Be sure to discuss all the details of coverage and costs with a licensed agent representing your insurance provider.
• Part D
Prescription drug coverage is available as an optional plan to parts A and B of Original Medicare benefits. You may also have coverage on your Part C plan.
The premium you pay per month depends on which plan you choose and where you live.
Your plan may also have a copayment, or fixed amount of money, for each prescription. The amount depends on your plan’s formulary and the tier on which your drug is categorized.
If you are getting ready to enroll in Medicare at age 65, it is a good idea to know what your costs will be. You can get more information at a local CMS office if you have more questions.