The cost of Medicare can easily catch you off guard, especially if you were accustomed to a comprehensive healthcare plan through your employer prior to retirement. Whether you stick with Original Medicare coverage or opt for a Medicare Supplement Plan or Advantage Plan, the expenses start with your monthly premium. In addition to that premium, the expenses continue with deductibles, copayments, coinsurance, and bills for uncovered services. What you ultimately pay annually for your healthcare depends on a variety of factors, and the out-of-pocket expenses can add up quickly.
The Cost of Original Medicare
Original Medicare contains Parts A and B. Unless you also qualify for Medicaid, you will have premiums, deductibles, and other out-of-pocket expenses under Original Medicare.
Is Original Medicare Part A Free?
Medicare Part A is premium-free for most beneficiaries, but it isn’t entirely free for all covered services. Consider the following:
- If you paid into Medicare for at least 10 years while working earlier in life, then you probably qualify for premium-free Part A.
- Even with no premium, you will pay a deductible for each benefit period that you’re admitted to the hospital. You, as a beneficiary pay the deductible before Medicare will start covering your expenses.
- If you remain in the hospital for more than 60 days, you will pay an additional $389 out of pocket. Remain admitted after day 90, and that added expense goes up to $778 per day. After day 150 in the hospital, Medicare will no longer pay, and you may have to assume all charges personally.
Is Medicare Part B Free?
Medicare Part B is not free. The costs include:
- All beneficiaries pay one monthly premium, which is set by the government annually.
- If your income from two years prior exceeds a designated income threshold, you will pay a higher monthly premium.
- Beneficiaries are also required to pay an annual deductible in addition to the standard 20% of costs beneficiaries pay for Medicare covered expenses.
- If you miss or delay enrollment in Part B, you may pay additional penalties once you do enroll. One way out of the penalty would be to qualify for the Special Enrollment Period.
What Does Medicare Part D Cost?
Medicare Part D is optional. Every plan is different, but you can expect to pay a monthly premium plus an annual deductible. There are higher premiums for beneficiaries with more income and possible penalties for those who delay Part D coverage.
Do Free Medicare Supplement Plans Exist?
Medicare Supplement Plans are designed to work with Original Medicare, covering some out-of-pocket expenses in exchange for a monthly premium. These plans aren’t free, though some are more affordable than others. No plan covers all out-of-pocket expenses.
The Cost of Medicare Advantage Plans
Plans secured through Medicare Part C are designed to work independent of Original Medicare. Instead of serving as secondary payment sources like supplement plans, they are the original and only payment source when a beneficiary seeks care.
These plans are administered by private insurance companies and include all coverage beneficiaries are entitled to through Parts A and B plus added coverage. For instance, your Medicare Advantage Plan may include:
- Prescription drug coverage
- Gym memberships
- Benefits for dental, hearing, and vision services.
Are $0 Premium Advantage Plans Really Free?
Most markets have $0 premium Advantage plans, but there are still out-of-pocket expenses to consider. The only thing free is the monthly premium that other Advantage plans charge.
You may still have some or all the following with a $0 premium plan:
- Part B deductible
Even though these Advantage Plans aren’t free, many are still great deals. That’s especially true if your plan covers the Part B deductible and offers benefits that you can’t get through Original Medicare. For example, having coverage for dental, hearing, and vision can save you hundreds of dollars that you would otherwise pay out-of-pocket for those services.
Can You Get Medicare for Free?
To receive genuinely free Medicare and not discounted prices there are a few options to consider.
Medicare + Medicaid = FREE Medicare for Many
The best way to do this is to apply for Medicare and Medicaid, which is known as dual eligibility or enrollment. That allows Medicaid to pay out-of-pocket expenses that come with Medicare.
The qualification standards for Medicaid vary by state, but it doesn’t hurt to apply if you have low income and often struggle to meet your out-of-pocket medical expenses. If you qualify, Medicare will pay your medical bills up to coverage limits, and then Medicaid will serve as a secondary payment source.
Medicare Savings Programs
If you qualify for Medicare Savings Programs, you may get free or nearly free Medicare after all savings are applied. Depending on the program you qualify for, you may receive help with the following expenses:
- Part A premiums
- Part B premiums
You can apply for these programs by contacting your state’s Medicare office.
You can’t get free Medicare with Extra Help, but this is a program that helps many beneficiaries pay for prescription drug charges. Depending on the level of help you qualify to receive, you may receive help with the following expenses:
- Part D late enrollment penalties
- Part D premiums
- Part D deductibles
- Part D coinsurance
You can call 1-800-MEDICARE to see if you qualify for Extra Help.
While Medicare isn’t free for most beneficiaries, there are some great programs in many states to make it more affordable. Check with your state’s Medicare office for details on available programs.
- What Does Medicare Cost?, Medicare.
- Qualifying for Medicaid, Medicare.
- Medicare Savings Program, Medicare.
- Help With Drug Costs, Medicare.