Find Cheap Health Insurance Quotes in Your Area
For all Medicare plans, cost will vary depending on what plans you decided to purchase, the company you purchase your plan from, your income and sometimes your age. For this reason, you should carefully balance your coverage needs and the costs of the plans when choosing the right mix of Medicare policies.
How much does Medicare cost?
The total cost of Medicare will vary depending on what parts and plans you select for coverage. Furthermore, your costs will also depend on your work history, monthly premium and deductibles. Below is a brief overview of what you could expect to pay on a monthly basis in premiums for each type of Medicare policy.
|Medicare plan||Monthly premium range|
|Part A||$0 or $458|
|Part B||$144.60 (will depend on your income)|
|Part C||$0 – $300|
|Part D||$10 – $100 (will depend on your income)|
|Medicare Supplement||$50 – $800 (will depend on the Supplement policy you elect and pricing structure)|
Medicare Part A cost
Medicare Part A will typically cost zero for most individuals who enroll in Medicare due to their previous participation in the workforce. In this case, if you have worked for more than 10 years or 40 quarters, then you would be eligible to pay $0 for Medicare Part A. The reason for this is because, during your working years, you contributed to Social Security and Medicare payroll taxes. This in return funds your enrollment in Medicare Part A.
For 2020, if you did not meet this threshold or did not work, then you would be required to pay full price for Medicare Part A health insurance, which is $458 per month.
In addition, a large cost for Medicare Part A is the deductible. Enrollees will find that in 2020, the deductible is $1,408, which represents an increase of $56 from the previous year. However, this cost is usually covered if you enroll in a Medigap policy or Medicare Advantage.
Cost of Medicare Part B
The cost of Medicare Part B will be dependent on your adjusted gross income (AGI). Generally, when you file your taxes, if you make less than $87,000 a year, then you would pay $144.60 per month. Below you can find an exact breakdown of the different income thresholds for Medicare Part B premiums. If you file joint taxes, then you can double these income levels to figure out what your monthly Part B premium would be. Furthermore, it is important to check these since they are updated annually by the Social Security Administration (SSA).
|Individual income||Monthly premium|
|Less than $87,000||$144.60|
|$87,001 – $109,000||$202.40|
|$109,001 – $136,000||$289.20|
|$136,001 – $163,000||$376.00|
|$163,001 – $500,000||$462.70|
|Greater than $500,001||$491.60|
Besides the monthly premium, enrollees in Medicare Part B will also be responsible for paying the deductible if they do not have another policy — such as Medicare Supplement — which covers it. For 2020, the Part B deductible is $198, which means you would need to pay $198 before coinsurance benefits will kick in.
Medicare Part C cost
Medicare Part C, or Medicare Advantage, costs will vary depending on the health insurance company you purchase your policy from. Part C is a pure private health insurance product, meaning that it will not be standardized across companies, and every policy will have different levels of coverage, premiums and deductibles. Therefore, you should shop around on the Medicare.gov website so that you can find the best Medicare Advantage policy.
Typically, enrollees in Medicare Advantage can expect to pay a monthly premium between $0 and $300, with the price varying due to differences in the coverage. In addition to the premium, a policyholder would also need to pay the yearly deductible for Medicare Advantage, which can be as high as $6,700.
Medicare Part D cost
Costs for Medicare Part D will be similar in nature to Medicare Part B — they will vary depending on your household income — but instead, you would also just need to pay an adjustment over whatever your plan costs. Thus, premiums will also vary by plan since these policies are offered through private health insurance companies.
Income levels for premium adjustments are exactly the same as Medicare Part B. Notice that the values in the table will be what you pay in addition to the monthly regular Part D premium.
|Less than $87,000||$0|
|$87,001 – $109,000||$12.20|
|$109,001 – $136,000||$31.50|
|$136,001 – $163,000||$50.70|
|$163,001 – $500,000||$70.00|
|Greater than $500,001||$76.40|
For example, you decided to purchase a Medicare Part D policy with a stated premium of $50 per month, and your income for the previous year was $150,000. In this case, your new income-adjusted monthly premium would be $100.70 ($50 + $50.70).
Cost of Medicare Supplement
The cost of a Medigap policy will depend on two factors: the policy you choose and the pricing structure of the company from which you are buying the plan. Firstly, different plan letters have different prices since each policy provides varying coverage. For example, the Medigap Plan G is a more comprehensive coverage plan when compared to Plan K and thus warrants a higher monthly premium.
Below we have outlined the average cost of all the Medigap policies. Notice that a range is given since different plan providers offer different premiums.
Secondly, Medigap prices will differ on the pricing structure, which can include your age, depending on what the health insurance company selects. There are three different ways in which Medigap policies can be priced:
The simplest rating system is community-rated, which means the same monthly premium is charged to everyone who has the same Medigap policy. This means your premium will not be based on your age but could go up because of inflation.
Issue-age-rated has a premium structure in which your monthly premium is based upon the age you are when you buy the Medicare Supplement plan. In this case, premiums will be lower for people who buy at a younger age and higher if you are older. For example, if you bought a Medigap policy at 65, your premium could be $200, but if you bought the same plan when you are 80, that policy might cost $300.
The final pricing structure is attained-age-rated, in which the monthly premium will be based on your current age every year. In other words, your premium will renew every year and increase as you continue to get older. For example, you may have started paying $150 per month for your Medigap policy at age 65, but by the time you are 75, you could be paying $175 per month.
As you can see, differences in pricing structure can vastly change the amount you will pay for Medigap coverage during your lifetime. It is for this reason that comparing the same letter plan across multiple companies is vital so that you can find the best Medigap plan available.