Medicare 101
What are the parts of Medicare?
And what are my cost shares?
Original Medicare, consisting of Part A (Hospital Insurance) and
Part B (Medical Insurance), involves a level of cost-sharing, meaning you'll be responsible for a portion of the expenses for covered services.
Here's a breakdown of your likely financial contributions for 2025:
1. Premiums:
Part A: Most individuals will not pay a monthly premium for Part A if they (or their spouse) have worked and paid Medicare taxes for a sufficient period (typically around 10 years). This is known as "premium-free Part A."
If you don't qualify for premium-free Part A, you might need to purchase it, with monthly premiums ranging from $285 to $518 in 2025, depending on work history.
Part B: In 2025, the standard monthly premium for Part B is $185.
However, some individuals may pay a higher premium based on their income, known as the Income-Related Monthly Adjustment Amount (IRMAA). This surcharge applies to those with a modified adjusted gross income exceeding certain thresholds.
Deductibles:
Part A: There is a deductible for inpatient hospital stays, which in 2025 is $1,676 per benefit period.
A benefit period starts with hospitalization and ends after 60 days of being out of a hospital or skilled nursing facility. You might face multiple benefit periods and deductibles within a single year.
Part B: The annual deductible for Part B in 2025 is $257.
Coinsurance
Part A: After meeting the deductible, you'll generally pay a daily coinsurance amount for longer hospital stays:
Days 61–90: $419 per day
Days 91 and beyond: $838 per "lifetime reserve day" (you have a total of 60 lifetime reserve days)
For skilled nursing facility stays, the coinsurance is $0 for the first 20 days, and $209.50 per day for days 21–100.
Part B: After your annual deductible is met, you'll generally pay 20% of the Medicare-approved amount for most services and items covered by Part B.
Important considerations
No out-of-pocket maximum with Original Medicare: Unlike Medicare Advantage plans, Original Medicare does not have an annual out-of-pocket maximum, meaning your costs can theoretically be unlimited.
Medigap policies: You can purchase a Medicare Supplement (Medigap) insurance policy from a private company to help cover some or all of Original Medicare's cost-sharing amounts, like deductibles and coinsurance.
Medicare Advantage plans: As an alternative, you can enroll in a Medicare Advantage (Part C) plan, which bundles Part A and Part B benefits, often with additional coverage like prescription drugs, and includes an out-of-pocket maximum.
What are the parts of Medicare?
And what are my cost shares?
Original Medicare, consisting of Part A (Hospital Insurance) and
Part B (Medical Insurance), involves a level of cost-sharing, meaning you'll be responsible for a portion of the expenses for covered services.
Here's a breakdown of your likely financial contributions for 2025:
1. Premiums:
Part A: Most individuals will not pay a monthly premium for Part A if they (or their spouse) have worked and paid Medicare taxes for a sufficient period (typically around 10 years). This is known as "premium-free Part A."
If you don't qualify for premium-free Part A, you might need to purchase it, with monthly premiums ranging from $285 to $518 in 2025, depending on work history.
Part B: In 2025, the standard monthly premium for Part B is $185.
However, some individuals may pay a higher premium based on their income, known as the Income-Related Monthly Adjustment Amount (IRMAA). This surcharge applies to those with a modified adjusted gross income exceeding certain thresholds.
Deductibles:
Part A: There is a deductible for inpatient hospital stays, which in 2025 is $1,676 per benefit period.
A benefit period starts with hospitalization and ends after 60 days of being out of a hospital or skilled nursing facility. You might face multiple benefit periods and deductibles within a single year.
Part B: The annual deductible for Part B in 2025 is $257.
Coinsurance
Part A: After meeting the deductible, you'll generally pay a daily coinsurance amount for longer hospital stays:
Days 61–90: $419 per day
Days 91 and beyond: $838 per "lifetime reserve day" (you have a total of 60 lifetime reserve days)
For skilled nursing facility stays, the coinsurance is $0 for the first 20 days, and $209.50 per day for days 21–100.
Part B: After your annual deductible is met, you'll generally pay 20% of the Medicare-approved amount for most services and items covered by Part B.
Important considerations
No out-of-pocket maximum with Original Medicare: Unlike Medicare Advantage plans, Original Medicare does not have an annual out-of-pocket maximum, meaning your costs can theoretically be unlimited.
Medigap policies: You can purchase a Medicare Supplement (Medigap) insurance policy from a private company to help cover some or all of Original Medicare's cost-sharing amounts, like deductibles and coinsurance.
Medicare Advantage plans: As an alternative, you can enroll in a Medicare Advantage (Part C) plan, which bundles Part A and Part B benefits, often with additional coverage like prescription drugs, and includes an out-of-pocket maximum.
