What Are Typical Out-of-Pocket Costs with Medicare Parts A and B?

May 11, 2021

Medicare Covers a Lot of Things – But Not Everything

While Medicare provides indispensable coverage for a wide range of medical treatment and services, seniors will still need to pay some out-of-pocket costs with Medicare. Just as you have to pay premiums, deductibles, copays, and other expenses with your private health insurance coverage, you’ll need to do the same once you turn 65 and enroll in Medicare.

Exactly how much you will pay during any given year in California depends to some degree on the specific care and services you receive. But you can do some planning and budgeting for your healthcare needs in your golden years by understanding the typical out-of-pocket costs with Medicare Parts A and B. Knowing what these costs might be can also help you decide whether you should enroll in a private supplemental insurance plan — called a Medigap plan — that can cover these expenses and can help you fill in these gaps in your Medicare coverage.

Medicare Parts A Out-of-Pocket Costs

Medicare Part A covers inpatient hospital stays, skilled nursing facility stays, some home health visits, and hospice care.

Part A Premiums

While some participants may have a premium for Part A coverage, 99 percent of Part A enrollees do not have to pay a premium since they have at least 40 quarters of Medicare-covered employment. If you paid less than 30 quarters of Medicare taxes, however, the standard Part A premium you will pay in 2021 is $471. If you paid 30-39 quarters of Medicare taxes, your standard Part A premium is $259.

Part A Hospital Inpatient Deductibles and Coinsurance

Part A inpatient hospital benefits (including benefits for inpatient mental health stays) are subject to a deductible of $1,484 for each benefit period in 2021, which covers the participant’s share of costs for the first 60 days of inpatient hospital care in a benefit period.

How much you’ll pay in coinsurance for an inpatient hospital stay largely depends on the length of time you spend in the hospital:

Days 1-60: $0 coinsurance for each benefit period
Days 61-90: $371 coinsurance per day of each benefit period
Days 91 and beyond: $742 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
Beyond lifetime reserve days: all costs

Home Healthcare and Hospice Care Costs Under Part A

You pay $0 for home health care services but will pay 20 percent of the Medicare-approved amount for Durable Medical Equipment (DME).

Similarly, you pay nothing for hospice care, though you may have a copay of up to $5 for each prescription drug and similar pain relief and symptom control products while you’re at home.

Medicare Part B Out-of-Pocket Costs

Part B Medicare program covers physician’s visits, outpatient care, preventive care services, and some home healthcare visits.

Part B Premiums

The standard 2021 Part B premium amount for individuals who made $88,000 or less and couples who filed jointly and made $176,000 or less in 2019 is $148.50. The premium increases for those with higher incomes. For example, individuals who earned more than $500,000 and jointly-filing couples who earned $750,000 or more in 2019 pay $504.90 in premiums for 2021.

Part B Deductibles and Copays

In 2021, the Part B deductible is $203. After meeting your deductible for the year, typical copays are 20 percent of the Medicare-approved amount for:

o Most doctor services (including most doctor services during inpatient hospital stays)

o Outpatient therapy

o Outpatient mental health services

o Durable medical equipment

No copays apply to clinical laboratory services or home health care services.

To find out the out-of-pocket costs with Medicare for specific treatments, services, tests, or procedures, you can go to the Medicare website and do a search. If you can’t find your test, item, or service, speak with your doctor or other health care provider about why you need the treatment in question and ask if Medicare will cover it.

Questions About Out-of-Pocket Costs With Medicare? Turn to Preferred Insurance for Answers

Medicare can be complicated. Understanding your costs, and whether you need supplemental coverage to reduce or eliminate those expenses, proves a lot easier with an experienced guide. Serving small businesses and individuals in Oceanside and throughout San Diego, Preferred Insurance can answer your Medicare questions and provide practical, affordable solutions during these uncertain times.

Contact Preferred Insurance today to arrange for a free consultation to discuss your small business or individual health insurance needs.