Understanding Original Medicare Costs

The Centers for Medicare and Medicaid Services (CMS) sets the costs for Original Medicare each year. There are costs for both Medicare Part A and Part B. 

Understanding Medicare Part A Costs

Medicare Part A costs include:

• Medicare Part A Premium
  You will not have to pay a premium for Medicare Part A if you or your spouse have worked and had payroll taxes deducted for ten years (40 quarters) or more. That is called premium-free Part A.

You may still be able to enroll in Medicare Part A if you do not have the minimum number of work credits, but you will need to pay a monthly premium. The amount of the premium depends on how many work credits you have earned.

• Medicare Part A Deductible
  You will have a deductible for inpatient hospital care each benefit period.

A benefit period starts when you are admitted to a hospital or skilled nursing facility. The benefit period ends once you have been out of the hospital and/or nursing facility for 60 days in a row.

• Medicare Part A Coinsurance
  The amount of coinsurance you are responsible for paying for inpatient hospital stays depends on the number of days you are admitted to the hospital or skilled nursing facility.

There is no coinsurance for the first 60 days of inpatient care. After 60 days, you have to pay a coinsurance amount for each additional day you are admitted.

• Medicare Part A Late Enrollment Penalty
  If you qualify for premium-free Part A, you will not be charged a late enrollment penalty.

If you are eligible for Medicare but have to pay a Part A premium, you will be charged a late enrollment penalty if you do not sign up when you are first eligible. The penalty will be an additional 10% on top of your monthly premium amount. You will pay this additional amount for twice the number of years that you delayed enrollment.

See the Medicare Part A costs for this year.

Understanding Medicare Part B Costs

Medicare Part B costs include:

• Medicare Part B Premium
  You will pay a monthly premium for Medicare Part B. The amount varies depending on your income. 

• Medicare Part B Income-Related Monthly Adjustment Amount (IRMAA)
  You might have to pay more for Medicare Part B if your income is above a certain dollar amount. The additional amount can change from year to year. 

The Social Security Administration will contact you if you have to pay Part B-IRMAA. The amount will be added to your monthly premium.

• Medicare Part B Deductible 
  Your Medicare Part B deductible is a determined amount of money that you must pay before your plan will pay a claim. The deductible will be an amount set by CMS each year. 

• Medicare Part B Coinsurance
  After you meet your annual deductible, you will be responsible for paying 20% of the cost of medical services. You pay for services as you get them. 

• Medicare Part B Late Enrollment Penalty
  An additional 10% will be added to your premium for each 12-month period you delay enrollment in Medicare Part B. You will have to pay it for as long as you have Medicare. 

See the Medicare Part B costs for this year.

How Do I Make Payments for Original Medicare?

Most people do not get a bill for Medicare Part A or Part B because the payments are deducted from Social Security or Railroad Retirement benefits. 

If you are not getting benefits from Social Security or the Railroad Retirement Board, you will get a bill in the mail. Medicare Part A is billed monthly. Medicare Part B is billed quarterly. 

There are several ways you can pay your bill:

• Pay online through your Medicare account 
• Sign up for Medicare Easy Pay to have payments automatically deducted from your bank account
• Process a payment from your bank’s online bill payment system 
• Mail a payment to Medicare