Medicare Part A costs in 2016

Medicare Part A (hospital insurance) is part of Original Medicare. Most Medicare beneficiaries don’t pay a Part A premium — you don’t have to pay this premium if you’ve worked at least 10 years (40 quarters) while paying Medicare taxes. If you do pay a premium for Medicare Part A, you may have to pay a higher premium if you delay enrollment until after you’re first eligible for the program.

Here’s a look at Medicare Part A costs for 2016:

Medicare Part A premium If you don’t qualify for premium-free Medicare Part A, it will cost you $226 per month if you’ve worked and paid Social Security taxes for 30 to 39 quarters, and $411 per month if you’ve worked and paid Social Security taxes for less than 30 quarters.
Medicare Part A hospital inpatient deductible You pay:

  • A $1,288 deductible for each benefit period
  • A $0 coinsurance for each benefit period for days 1-60
  • A $322 coinsurance per day of each benefit period for days 61-90
  • A $644 coinsurance per “lifetime reserve day” for each benefit period for days 91 and over. (You get up to 60 lifetime reserve days over your lifetime; they only apply to hospital stays over 90 days.)

After you’ve used up your lifetime reserve days, you pay all costs, unless you have other coverage.

Skilled Nursing Facility Stay You pay:

  • $0 for the first 20 days of each benefit period
  • $161 per day for days 21-100 of each benefit period
  • All costs for each day after day 100 of the benefit period

Source: Medicare.gov

Medicare Part B costs in 2016

Medicare Part B (medical insurance) is also part of Original Medicare. Part B carries a monthly premium and an annual deductible. Costs shown below are for 2016.

Medicare Part B premium $104.90 in 2016. This is unchanged from 2015, unless you fall into one of the following categories, in which case you’ll typically pay $121.80 in 2016 per month:

  • You enroll in Medicare Part B for the first time in 2016.
  • You’re dual-eligible: that is, you get Medicaid assistance in addition to being enrolled in Medicare. Your state pays your Medicare Part B premium through Medicaid.
  • You don’t receive Social Security benefits.
  • Your income is over a certain amount; see the table below.
  • You get billed directly for your Part B premium.
Medicare Part B deductible $166
Medicare Part B monthly premiums for 2016 based on your annual income in 2014
You pay… If you file an individual tax return and your income was: If you file a joint tax return and your income was:
$121.80 ($104.90 if you were enrolled in Medicare prior to 2016) $85,000 or less $170,000 or less
$170.50 $85,001-$107,000 $170,001-$214,000
$243.60 $107,001-$160,000 $214,001-$320,000
$316.70 $160,001-$214,000 $320,001-$428,000
$389.80 Over $214,000 Over $428,000
Source: Medicare.gov
You pay… …if you’re married but file a separate tax return from your spouse and your annual income in 2014 was:
$121.80 ($104.90 if you were enrolled in Medicare prior to 2016) $85,000 or less
$316.70 $85,001-$129,000
$389.80 Over $129,000
Source: Medicare.gov

Besides the premium and deductible, there are other Medicare Part B costs you should know about: for example, many Medicare services and supplies require a 20% coinsurance payment or a copayment.

Medicare Advantage costs in 2016

Medicare Advantage (Medicare Part C) is private health insurance through which you can get your Medicare Part A and Part B benefits. Medicare Part A continues to pay for hospice benefits when you have a Medicare Advantage plan. Some Medicare Advantage plans include prescription drug coverage, and may include other benefits as well. Premiums and deductibles for Medicare Advantage plans may vary depending on which plan you choose and the extent of your health coverage.

eHealth analyzed results from over 22,000 consumers who chose Medicare plans using eHealth’s online plan comparison tool, and published a Choice and Impact Study in 2014 that found:

  • First-time enrollees in Medicare Advantage Prescription Drug Plans may have saved as much as $2,225 in one year.
  • Beneficiaries who switched from one Medicare Advantage Prescription Drug plan to another could have saved an average of $218 in one year.

Medicare Part D Prescription Drug Plan costs in 2016

Costs for Medicare Part D Prescription Drug Plans may differ depending on various factors, such as the plan you choose and the medications you use. Deductible amounts are determined by the plan; each plan may have a different deductible amount. Some plans may have a $0 deductible amount, and no plan may have a deductible higher than $360 in 2016.

Be aware that many Medicare Part D Prescription Drug Plans place a limit on how much they will pay for your prescription drugs in one year. For the year 2016, once you and your plan have spent a combined $3,310 on covered prescription drugs, you’ll reach the coverage gap (sometimes also referred to as the “donut hole”). During the coverage gap, you may have to pay up to 45% of your plan’s price for covered brand-name prescription drugs and 58% of the price of generic drugs.

If you don’t sign up for Medicare Part D prescription drug coverage (a stand-alone Medicare Part D Prescription Drug Plan or a Medicare Advantage Prescription Drug plan) when you’re newly eligible for Medicare, you might be subject to a late-enrollment penalty when and if you decide to get this coverage at a later date. You may be able to avoid this penalty if you’re covered by another prescription drug plan that’s “creditable” (expected to pay, on average, at least as much as Medicare typically pays).

If you go without creditable drug coverage for a period of 63 days or more, you could incur the penalty when you sign up for a Medicare Prescription Drug Plan. You can calculate the late-enrollment penalty by multiplying the number of months you went without creditable coverage by 1% of the national base beneficiary premium, which is $34.10 in 2016. Then round the total to the nearest $0.10, and add it to your Medicare Prescription Drug Plan’s monthly premium.