Medicare Costs for 2021

What are your out of pocket costs on Medicare? What you pay out of your pocket will come from premiums (your monthly bill), deductibles (what you pay before Medicare pays), copays (a fee for using a service), and coinsurance (paying a percentage of the bill), but depending upon your income and the plan you choose these costs can vary drastically. 

Medicare Part A Costs

Original Medicare comprises Medicare A and B. Medicare A deals with inpatient hospital care, hospice, and related services. If you or your spouse:

• Worked for 10 or more years, you pay no premium.
• Worked between 7.5 and 10 years, your premium is $259 per month.
• Worked fewer than 7.5 years, your premium is $471 per month.
  
  

Medicare Part A has a deductible for a hospital stay of $1,484. This is the out of pocket costs for a hospital stay before Medicare pays.  If you are in the hospital for longer than 60 days you will begin having a copayment of $371 per day for days 61 to 90, $742 per day for days 91-150, and all days after that you pay the full cost of your hospital stay. For covered care in a Skilled Nursing Facility Medicare A will pay the full amount for days 1-20, but days 21-100 are $185.50 per day and you are responsible for all the costs after day 100.

Medicare Part B Costs

Medicare Part B covers doctor services, outpatient treatments, durable medical equipment, and much more. There is a monthly premium which is based upon your income from two years ago. 

                                   

If your yearly income in 2019 (for what you pay in 2021) was
File individual tax return	File joint tax return	Medicare B Monthly Premium
$88,000 or less	$176,000 or less	$148.50
above $88,000 up to $111,000	above $176,000 up to $222,000	$207.90
above $111,000 up to $138,000	above $222,000 up to $276,000	$297.00
above $138,000 up to $165,000	above $276,000 up to $330,000	$386.10
above $165,000 and less than $500,000	above $330,000 and less than $750,000	$475.20
$500,000 or above	$750,000 and above	$504.90

The annual deductible is $203, and after the deductible is reached your coinsurance is 20% of the Medicare approved amount. Some recipients who have significantly lower incomes may have premium and coinsurance costs absorbed by their state's Medicare Savings Program.  Finally if you did not enroll in Medicare B and did not have other credible insurance coverage you will be charged a Late Enrollment Penalty based on the amount of time that you didn’t have coverage. 

Figuring in Medicare Advantage and Other Plans

Medicare Advantage (Part C) are getting your Medicare through a private insurance company with different fee structure than explained above.  You will pay the copayments or coinsurance that the plan offers instead of the Medicare A and B out of pocket costs.  These plans must cover all things that Original Medicare covers and can also have additional services such as prescription, vision, and dental.

The average premium cost among the 47 available Medicare Advantage plans available in New Jersey is $26.73, down about a dollar from the average cost in 2020. Still, some premiums are as low as $0, depending on the plan you choose.  

Medicare Part D, prescription drug insurance, lowers drug costs for Medicare recipients. There are 30 drug options available in New Jersey and the premiums range from $7.30 per month to $97.70.

Do you have questions about your Medicare costs? Do you want help choosing a Medicare plan that is right for your needs? Contact an agent with New Jersey Medicare Brokers for free assistance.