Quick Guide to Medicare and Costs

To provide some insight on the size and scope of Medicare, below are some statistics taken from the 2017 Medicare Trustee Report.

  • In 2016, Medicare covered 56.8 million people
  • 47.8 million of these were 65 and older, and 9.0 million disabled
  • Over 32 percent of these beneficiaries have chosen to enroll in Part C private health plans that contract with Medicare to provide Part A and Part B health services.
  • In 2016, Total Medicare expenditures were $679 billion
  • The average benefit for Medicare enrollees was $12,829 (for all parts of Medicare)

More relevant statistics are those that concern individuals out–of–pocket spending. These out of pocket expenses are the reason many people consider a Medicare Supplement to fill in the 'gaps' one may encounter regarding co–payments, deductibles, co–insurance, and excess charges.

Medicare Part A (hospital coverage)

Part A Premiums

Premium: Free for most people. If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $413. If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $227. In most cases, if you choose to buy Part A, you must also have Medicare Part B (Medical Insurance) and pay monthly premiums for both.

Part A: What could I pay out of pocket?

If you are hospitalized, your Medicare Part A coverage and out-of-pocket expenses for each benefit period are as follows (assuming your hospitalization meets Medicare requirements):

  • Deductible: You pay a deductible of $1,316 for each benefit period
  • Coinsurance per benefit period for hospitalization:
    • For days 1 to 60: No coinsurance payment
    • For days 61 to 90: $329 coinsurance per day
    • For days 91 and beyond: $658 coinsurance per “lifetime reserve day”
    • After a 90-day hospitalization in one benefit period, each additional day counts toward your lifetime reserve of 60 days of hospitalization covered by Medicare Part A.
    • For days beyond your lifetime reserve days: You pay all costs.

If you receive care in a skilled-nursing facility, you pay a daily coinsurance of $164.50 for days 21 through 100 in a benefit period. Medicare Part A typically doesn’t cover your costs for days 101 and beyond.

Medicare Part B (Routine Health Services)

Part B Premiums

The standard Part B premium amount in 2017 is $134 (or higher depending on your income). However, most people who get Social Security benefits pay less than this amount. This is because the Part B premium increased more than the cost-of-living increase for 2017 Social Security benefits. If you pay your Part B premium through your monthly Social Security benefit, you’ll pay less ($109 on average.) You may pay a higher premium if the modified adjusted gross income reported on your individual IRS tax return two years ago is above $85,000.

Part B: What could I pay out of pocket?

Deductible: You pay $183 per year for your Part B deductible. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services, outpatient therapy, and durable medical equipment.

Have Questions?

If at any point you would like to speak with someone for more information,
contact 1-800-258-7041 or fill out our Request Information form!