If you are either a Medicare beneficiary or a Medicare agent, you need to know the cost of Medicare premiums. Each year the costs are subject to change. Both enrollees and agents should stay updated on cost and coverage changes. Not having the correct information can be a costly mistake.
Medicare Part A
There is no premium ($0) for Part A for the majority of people most people. Beneficiaries who worked or had a working spouse who paid Medicare taxes for at least 40 quarters (10 years) receive premium free Part A.
Those who do not qualify for the $0, premium free Part A may be eligible to purchase it. Beneficiaries must sign up for Part B in order to purchase Part A. For 2024, the monthly premium is either $278 or $505. This depends on the length of time either the beneficiary or their spouse worked and paid Medicare taxes.
Please note: Beneficiaries who do not purchase Part A when they are eligible (in most cases at 65 years old), may pay a penalty. The penalty adds 10% to the monthly Part A premium and lasts for twice the number of years that you neglected to sign up for Part A.
Medicare Part B
The monthly premium for Part B is $174.70 in 2024. This amount usually changes on January 1st each year. This premium may be higher for some individuals with a higher income level. This additional charge is called an IRMAA, and it effects about 8% of Medicare beneficiaries. The Additional charge ranges from $69.90 up to $419.30 added to the monthly premium.
Medicare may charge a late enrollment penalty to anyone who did not enroll in Medicare Part B when they were first eligible or did not have creditable coverage in place at that time. The LEP for failing to enroll in Part B is 10% for every year the beneficiary did not sign up for Part B. This penalty is different than the Part A penalty; it will last for as long as the beneficiary has Part B.
Some individuals qualify for help with Part A & Part B costs
If you have limited income and resources, you may be able to get help from your state to pay your premiums and other costs, like deductibles, coinsurance, and copays.
Medicare Part D
This premium varies greatly and depends on the plan each beneficiary chooses. The premium for each plan can change annually as well as the plan choice of each individual may also change each year. If a beneficiary receives an IRMAA on their Part B premium, they will also receive an IRMAA on their Part D premium.
Part D plans can charge a LEP if the beneficiary goes without creditable coverage for a period of 63 or more. The penalty is 1% for each month the beneficiary neglects to enroll in a Medicare Part D plan. That can equal an additional 12% for each year without coverage. This LEP is similar to the LEP for Part B because, it is applied for as long as the beneficiary has Part D coverage. Enrollees who have Extra Help, do not have to pay the LEP.
Medicare Part C (Medicare Advantage)
Not all Medicare beneficiaries enroll in Medicare Part C (Medicare Advantage) plans. Enrollment in these plans is an individual choice. The premiums for these plans vary greatly and can cost as little as $0 and can go up from there. Many of these plans are available for $0, but that depends on the plan and the area it is offered in.
To enroll in a Medicare advantage plan, beneficiaries must pay their Part B premium. Medicare Advantage plans are not completely free even if they have a $0 premium, members are still responsible for deductibles, co-pays and coinsurance payments. This cost of these expenses varies based on the plan.
Additionally, these plans have an annual out-of-pocket maximum. Once that amount is paid by the enrollee, the plan pays 100% of the cost for covered health services. This amount is another variable that is based on the plan choice.
Watch a quick Youtube video on the differences between Medicare advantage and Medicare Supplement plans
Medicare Supplements (Medigap)
Medicare Supplements help pay the enrollees share of costs after Original Medicare pays it’s share. In most areas, there are 10 different plan choices and several carriers offering each plan. For that reason, it is impossible to give a flat premium rate for these plans. Each plan is quoted based on plan, area and carrier. Anyone who enrolls in a Medicare Supplement plan must have Part A and Part B coverage and pay that premium.