The Cost of Medicare & Medicare Advantage

October 7, 2021

The annual election period for Medicare and Medicare Advantage opens October 15 and runs through December 7. For a more comprehensive compare and contrast of the two main ways to get Medicare, please refer to our post here.

However, just understanding the costs associated with each plan can be confusing enough. Below, we present a breakdown of standard costs at a glance associated with each type of plan.

Original Medicare

Part A (Hospital Insurance)

Premiums

Most people qualify for premium-free Part A. Find out if you qualify here. 


If you don’t, you can still purchase it in conjunction with Part B.
Part A premiums in 2021 were either $259 per month (if you paid Medicare taxes for 30-39 quarters) or $471 per month (if you paid Medicare taxes for <30 quarters).

Deductibles

$1,484 in 2021 for each benefit period.

Coinsurance

Days 1-60: $0 coinsurance for each benefit period

Days 61-90: $371 coinsurance per day of each benefit period

Days 91+: $742 coinsurance per each "lifetime reserve day" after day 90 for each benefit period (up to 60 days over your lifetime)

Beyond lifetime reserve days: all costs

Part B

(Medical Insurance)

Premiums

The standard Part B premium amount is $148.50. Depending on your income, you may pay an additional Income Related Monthly Adjustment Amount (IRMAA).


Part B premiums are automatically deducted from benefit payments if you receive benefits from Social Security, Railroad Retirement Board, or the Office of Personnel Management.

Deductible

$203 in 2021.

Coinsurance

After you meet your deductible for the year, you typically pay 20% of the Medicare-Approved Amount for covered services. 

Part D

(Prescription Drugs)

Premiums

The Part D monthly premium varies by plan (higher-income consumers may pay more). Compare costs for specific Part D plans.

Deductible

Deductibles vary between plans. No Medicare drug plan may have a deductible more than $445 in 2021. Some Medicare drug plans don't have a deductible.

Coinsurance

Once you and your plan spend $4,130 combined on drugs (including deductible), you’ll pay no more than 25% of the cost for prescription drugs until your out-of-pocket spending is $6,550, under the standard drug benefit.

Medicare Advantage

Part C


(Medicare Advantage)

Premiums

Many Medicare Advantage Plans have a $0 premium. Some plans may even pay for part or all of your Part B premium. 


If you enroll in a plan that does charge a premium, you pay this in addition to any Part B premium remaining and Part A premium if you don’t qualify for premium-free Part A.

Deductibles

Varies by plan. 

Coinsurance

Varies by plan. All Medicare Advantage plans have a yearly limit for out-of-pocket expenses so you are not financially responsible for any Part A or B services after you meet that limit. 

Visit www.Medicare.gov/plan-compare to shop and compare plans to determine which best fits your needs. The Medicare Call Center can help you with specific questions about billing, claims, medical records, expenses, and more. They can be reached at 1-800-MEDICARE (1-800-633-4227).

If you’re looking for a way to unlock additional money for unexpected medical expenses, Truehold’s sale-leaseback option may be a good solution to allow you to access your home’s equity. Speak to one of our advisors who can provide more information on Truehold’s program, as well as answer questions you have about choosing Medicare or Medicare Advantage.

Further Reading

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