To start, let's take a look at common situations where out-of-pocket costs can occur.
Medicare Part A costs
Most people who’ve worked and paid taxes are automatically enrolled in Part A. This helps cover hospital stays and nursing care but not doctors' visits or long-term care.
There are some out-of-pocket costs you’ll have to pay on your own. For example, you probably won’t have to pay a premium for Part A if you paid payroll taxes when you were employed. However, there is a deductible you’ll have to meet before your Part A benefits kick in.
In 2021, the annual deductible is $1,484 per benefit period before the plan pays for hospitalizations. Generally, it covers about 80% of Medicare-approved inpatient costs for the first 60 days of a hospitalization. If your stay is longer than that, or if a service is above the Medicare-approved amount, you'll be responsible for paying extra.
Medicare Part B costs
This pays for a portion of doctors’ appointments, outpatient procedures, laboratory tests, ambulatory care, mental healthcare and some home health services. The Medicare Part B premium in 2021 is $148.50 a month (or higher, depending on your income)—plus an annual deductible of $203.
Medicare Part C costs
Also known as Medicare Advantage, these plans include Part A and Part B benefits. While Original Medicare generally does not cover dental and hearing, Medicare Advantage plans often include additional coverage for routine dental and hearing care, along with prescriptions.
That doesn't mean out-of-pocket costs will not pop up. Fortunately, all Medicare Advantage plans offer an annual maximum out-of-pocket limit, after which you pay nothing for covered services.
Medicare Part D
If you don’t choose a Medicare Part C plan that includes prescription drug coverage, but still want prescription coverage, you can enroll in a stand-alone Part D prescription drug plan. Most plans require a monthly premium, deductibles and copays.
Note that there is a , opens new window for signing up for Part D after the deadline. Be sure to check each plan’s drug list before you decide on a plan, to ensure that the medicines you take are included.