Medicare Deductible Guide 2020
Did Medicare Deductibles Change in 2020?
You paid into Medicare all of your working career. You would think Medicare would be free once you enroll—but that’s only partially true. If you’re confused about what you’ll pay for Medicare, we have you covered.
Medicare Part A Costs in 2020
Part A covers inpatient hospitalization, skilled nursing facilities, home health care, and hospice care. For most people, this is the closest thing to free they’ll get from Medicare, as Medicare Part A (generally) doesn't charge a premium.
Tip: If you don't qualify for Part A, you can buy Part A coverage. In 2020, costs range between $252-$458 each month, depending on how long you paid Medicare taxes.
That doesn’t mean that you aren’t charged a deductible. For each benefit period, you pay the first $1,408 in 2020. A benefit period begins when you enter the hospital and ends when you haven’t received any inpatient hospital services for 60 consecutive days. If you re-enter the hospital the day after your benefit period ends, you’re responsible for the first $1,408 of charges again.
Part A also charges coinsurance if your hospital stay lasts more than 60 days. In 2020, for days 61 to 90 of your hospital stay, you pay $352 per day; Days 91 through the balance of your lifetime reserve days, you pay $704 per day. Lifetime reserve days are 60 days that Medicare gives you to use if you stay in the hospital for more than 90 days. You only get 60 and they don’t renew.
If you did some simple math, you probably noticed that an extended hospital stay could cost you a lot of money. That’s why it’s important to add a Medicare supplement to your original Medicare plan.
Medicare Part B Costs in 2020
Part B is considered your medical insurance. It covers medical treatments and comes with a monthly premium of $144.60 in 2020. A small percentage of people will pay more than that amount, if reporting income greater than $87,000.
Part B also comes with a deductible of $198 per year, in 2020. Unlike Part A, your deductible isn’t tied to a benefit period or other complicated formulas. Once you pay your $198, which is likely to happen after your first or second doctor visit or procedure of the year, Medicare pays 80% of the Medicare-approved amount. That leaves you on the hook for only 20%.
Medicare Part C Costs in 2020
Parts A and B are called Original Medicare. As part of what you paid into Medicare throughout your working years, you receive original Medicare and very little cost to you. Although it might feel like you’re paying more than you should, the cost to purchase the same insurance on the open market would be significantly higher when you factor in what will likely be decades of coverage.
Part C is where you begin to have options. Part C, also called Medicare Advantage are plans available for purchase from the private insurance market, that extends Medicare’s coverage. Having some sort of Medicare supplement is highly recommended to avoid the potential out-of-pocket costs that could come with only having Original Medicare.
In 2020, Part C or Medicare Advantage premiums "are expected to decline by 23 percent from 2018," according to Centers for Medicare & Medicaid Services. The average plan premium is about $23.00 a month in 2020.
But coinsurance, copayments, premiums, and deductibles may still vary depending on your plan of choice.
In general, the higher the costs, the better the coverage. Most people will see their healthcare spending increase as they get older, so it's best to get coverage that covers as many contingencies as possible.
Medicare Part D Costs in 2020
Once you reach retirement age, you’re probably taking at least one prescription medication on a regular basis. That’s where Part D comes in.
You can choose from two options to get prescription medication. You can either sign up with a private insurance companies you can compare on the Medicare website, or you can can get prescription drug coverage through your Part C program.
Like Part C, each plan has different coverage, deductible, and copayment options. In general, Part D is included in your plan premium, but those with a reported income of more than $85,000 will pay an additional amount. Before signing up with a company, make sure that it covers the drugs you take in one of the lower tiers to keep your costs under control.
Sometimes, other types of benefits, insurance and social services can influence other types of insurance can influence Part D benefits, including employer coverage, Medicaid and veterans' benefits.
To enroll in Part D, you must have either Parts A and B or Part C.
Medicare.gov. "What Part A Covers," Accessed Jan. 15, 2020.
Medicare.gov. "How Much Does Part A Cost?" Accessed Jan. 15, 2020.
Centers for Medicare & Medicaid Services. "2020 Medicare Parts A & B Premiums and Deductibles." Accessed Jan. 15, 2020.
Medicare.gov. "Inpatient Hospital Care." Accessed Jan. 15, 2020.
Medicare.gov. "Medicare Costs at a Glance." Accessed Jan. 15, 2020.
Centers for Medicare & Medicaid Services. "Original Medicare (Part A and B) Eligibility and Enrollment." Accessed Jan. 15, 2020.
U.S. Department of Health & Human Services. "What is Medicare Part C?" Accessed Jan. 15, 2020.
Centers for Medicare & Medicaid Services. "Trump Administration Drives Down Medicare Advantage and Part D Premiums for Seniors." Accessed Jan. 15, 2020.
Medicare.gov. "How to Get Prescription Drug Coverage." Accessed Jan. 15, 2020.
Medicare.gov. "How Part D Works With Other Insurance." Accessed Jan. 15, 2020.