Medicare provides a huge amount of benefits for free, but this, sadly, does not mean that there is no cost. Since the dawn of the concept of insurance, insurers have felt that there has to be some cost-sharing to ensure that the beneficiaries of insurance have “skin in the game” and do not simply waste benefits. Medicare, in both its original and more modern forms, is squarely in that tradition.
And of course, if you add supplemental benefits such as a Medigap or Prescription Drug plan, there will usually be a premium for those too. Because Medicare Advantage Plans have been generously funded by the government, some of them charge no premiums and even offer to refund all or part of your Part B premium. All one can say here is that your net cost for your particular Medicare Advantage Plan is whatever the plan chooses to charge you for the benefits you actually use.
Where Is the Out-of-Pocket Limit?
It is vitally important that you understand that while most commercial insurance today has an out-of-pocket limit beyond which all expenses are covered and you pay nothing, this is not true of Original Medicare and most Medigap plans. Medigap Plans G and L have out-of-pocket limits; all Medicare Advantage Plans have out-of-pocket limits; no other plans do.
Medicare Premiums
For 2022, the vast majority of Medicare beneficiaries will pay nothing for Part A and $170.10 per month for Part B. Some with higher incomes will have higher Part B premiums, and those with fewer than 40 quarters of work who purchase part A will have a 2022 premium of $499 or $274 per month, depending on the number of quarters worked. The Part B premium in 2022 for virtually everyone will be $170.10; per month; some higher-income beneficiaries will pay more.
Medicare Deductibles
The Medicare Part A deductible, the amount you pay before Medicare pays anything, for 2022 is $1,556 for each “spell of illness.” A spell of illness, also called a benefit period, is a period in which you were hospitalized. It ends when you have been out of the hospital for 60 days.
The Part B deductible for 2022 is $233, which covers the entire year.
Medigap and Medicare Advantage Deductibles
The Medigap and Medicaid Advantage deductibles are determined by your individual plans.
Medicare Co-Payments
Medicare’s Part A copayments for each benefit period in 2022 will be $0 for the first 60 days: $389 per day for days 61-90, and $778 per “lifetime reserve day” for days 61-90. You get 60 lifetime reserve days; after that, Medicare does not pay.
Part B copayments are almost always 20% of the Medicare cost of the service rendered.
Skilled Nursing Facility (SNF) care will remain at $0 for days 1 to 20 for each benefit period and will be $194.50 per day for days 21 to 100 of each benefit period in 2022.
Prescription Drug Plan (Part D) Deductibles, Premiums and Co-payments
The maximum Part D deductible for 2022 is $480, but plans do not have to charge this much – some have no deductible at all. The average premium for 2022 will be $30 per month. Copayments will range from around $1 to around $10, but the exact figures depend on your individual plan. Remember that if you are enrolled in a Medicare Advantage Plan, prescription drugs may be included for no additional premium.
What’s the Bottom Line?
Because of the wide variety of plans, exact figures are hard to come by, but we do know that for Original Medicare, the average out-of-pocket cost in 2018 was $6,150 per person enrolled.
