The Cost Difference Between Medicare Part A & Medicare Part B

The Cost Difference Between Medicare Part A & Medicare Part B

There are a number of differences between Medicare Part A and Medicare Part B, but of special import today is cost.

The first thing to note is that eligibility and enrollment for both parts of Medicare are alike, for the most part. But variances in costs, including premiums, deductibles and coinsurance totals are where plans really become interesting.

Medicare Part A and Part B Monthly Premiums

First up, the monthly premiums and the cost of both parts of Medicare.

For Medicare Part A, most people do not pay monthly premiums. Also known as the rather on-the-nose “premium-free Part A,” this hospital insurance is covered by taxes paid by recipients or their spouses across a working career that assembles at least 30 quarters.

If a recipient chooses to buy Medicare Part A or does not have at least 30 quarters of payment through taxations, the monthly premium totals $437 currently. If Medicare taxes were paid for 30 to 39 quarters and Medicare Part A must be purchased rather than assigned without premiums, the monthly cost is generally $240.

There are late enrollment penalties that may pump up the premium by 10 percent if Medicare Part A was not purchased during the period of first eligibility.

Comparatively, the Medicare Part B premium for 2019 is $135.50 per month. This amount is paid by most people with Medicare Part B. There are income-related monthly adjustment amounts, also known as IRMAAs, to factor in. This principally breaks down as another charge added to the premium each month. The IRMAA is calculated from modified adjusted gross income from the tax return two years prior.

Figuring out the IRMAA for each individual case can be complex, but there are basic rules that can be found on the Medicare website. Using these guidelines, beneficiaries should be able to determine their specific supplementary costs.

And yes, there is a late enrollment penalty for Medicare Part B as well. Not signing up during the period of first eligibility carries a penalty for as long as the client has Part B insurance, which means it could rise 10 percent for each full year period that clients could have had Medicare Part B but failed to enroll. Clients will have to wait until the enrollment period of Medicare Part B, which takes place from January 1 to March 31, in order to sign up for coverage that commences in the beginning of July.

Medicare Part A and Part B Deductibles

For Medicare Part A, the deductible for the current relevant year – 2019 – is $1,364 for each benefit period for a hospital inpatient stay.

For Medicare Part B, the deductible is $185 each year based on the 2019 rates. After that deductible is reached, recipients pay 20 percent of the Medicare-approved amount for other doctor services, any outpatient therapy and types of medical equipment prescribed by a doctor for use in the home. The latter includes equipment like wheelchairs, walkers and hospital beds.

Many of the deductibles for Medicare Part B are variable, which means they can be situational and difficult to navigate. Recipients pay 20 percent of the amount for outpatient services like medical diagnosis, for instance, but may pay more for services done in a hospital outpatient scenario than in a doctor’s office.

Clients characteristically pay nothing for things like depression screening. This depends on whether or not a doctor or health care provider accepts assignment. Clients will have to pay a percentage of the amount for partial hospitalization for mental health issues, which could also include a coinsurance payment added to the standard Part B deductible.

Medicare Part A and Part B Coinsurance

Finally, clients of Medicare Part A pay an established coinsurance dollar amount depending on the length of hospital stays. For stays up to and including 60 days, there is no coinsurance. But from day 61 to day 90, coinsurance totals $341 per day of each benefit period. Following that, days beyond day 91 total twice that - $682 per day – for each so-called “lifetime reserve days.”

For Medicare Part B, coinsurance is relative to each medical bill. Clients, for the most part, pay 20 percent of most doctor services after the deductible is met. This includes outpatient therapy and equipment like wheelchairs and walkers for the home.

This blog post here provides additional information and resources if you need help with your Medicare Costs.