There are several “parts” to Medicare, as you may know. Costs and benefit details may change from one year to the next. Here’s a quick summary of out-of-pocket Medicare costs in 2020.
2020 Medicare Part A costs
Medicare Part A helps cover inpatient hospital expenses.
As a Medicare beneficiary, you’re generally eligible for premium-free Medicare Part A coverage if you or your spouse paid Medicare taxes while working for 10 years or more. However, beneficiaries who do need to pay for Part A coverage in 2020 pay a premium up to $458 per month.
The Medicare Part A deductible for 2020 is $1,408 for each benefit period. A deductible is the amount you, the beneficiary, must pay out of pocket before Medicare begins covering its share of covered services.
Further, the 2020 coinsurance for hospital inpatient stays for each benefit period is as follows:
- No coinsurance for covered hospital stays 60 days or less.
- A daily $352 coinsurance for days 61 through 90 of a covered stay.
- A daily $704 coinsurance for days 91 and beyond (days 91 and beyond in each benefit period are considered part of your “lifetime reserve days”; you can have up to 60 of these days over your lifetime).
- After lifetime reserve days are used up, you pay all costs (unless you have separate insurance coverage outside of Medicare Part A that covers these costs).
The 2020 coinsurance for covered skilled nursing facility stays for each benefit period is the following:
- No coinsurance for 20 days or less
- A daily $176 coinsurance for days 21 through 100
- You are responsible for all costs for days 101 and beyond
2020 Medicare Part B costs
Medicare Part B, medical insurance, helps cover services and supplies including, but not limited to, doctor visits, lab tests, and wheelchairs.
Your Medicare Part B premium amount may vary depending on your situation. The Part B standard monthly premium is $144.60 in 2020.Your Part B premium could be higher if your income is above a certain amount. Beneficiaries with higher modified adjusted gross incomes, as reported on their IRS tax return from two years ago, may have to pay a higher premium.
The 2020 annual deductible for Medicare Part B services is $198 per year. You’re typically also responsible for 20% of the Medicare-approved amount for most medical services, assuming that the doctor or other health-care provider accepts Medicare assignment (Medicare-approved amount as full payment). Medicare Part B provides many preventive services at no cost to you; these services are available without requiring you to meet your deductible. There may be limits on physical therapy, occupational therapy, and speech language pathology services. If so, there may be exceptions to these limits.
2020 Medicare Advantage (Part C) costs
The Medicare Advantage program, also known as Medicare Part C, provides a way to receive your Original Medicare (Part A and Part B) benefits, except for hospice care, which Part A covers. Medicare Advantage plans are offered by private health insurance companies approved by the Medicare program, and sometimes include additional benefits such as routine vision care. While these insurance companies must follow government regulations, they have some flexibility in setting certain costs and/or additional coverage rules, as well as what additional benefits they may provide with their coverage. This means that the availability, benefits, costs, and other details of these plans can change from year to year.
In regard to 2020 costs, your out-of-pocket expenses depend on the Medicare Advantage plan you’re enrolled in.
2020 Medicare Part D costs
Medicare Part D Prescription Drug Plans are similar to Medicare Advantage plans in that these plans are also offered by Medicare-approved private insurance companies. Medicare Part D prescription drug plan availability, costs, benefits, and other details also vary by plan and may change each year.
While insurance companies set most of their Medicare Part D costs, there are certain predetermined limits set by the government on an annual basis. In 2020, no Part D Prescription Drug Plan can have an annual deductible higher than $435.
There are also limits related to the Medicare coverage gap, also known as the “donut hole.” Not everyone will reach this gap. Beneficiaries will hit this Medicare Part D coverage gap in 2020 when they and their plan have spent a total of $4,020 on covered prescription drugs, which includes the annual deductible (if your plan has one). Once beneficiaries have entered the coverage gap in 2020, they will generally pay no more than 25% of their plan’s cost for brand-name drugs and generic drugs. Beneficiaries will exit the coverage gap and enter the catastrophic coverage phase when they reach a total of $6,350 on eligible prescription drug costs for the year. After you have reached the catastrophic period, you’ll pay a small copayment or coinsurance amount for covered prescription drugs for the rest of that year.