Part A costs:	What you pay in 2023:
Premium	$0 for most people (because they or a spouse paid Medicare taxes long enough while working - generally at least 10 years). If you get Medicare earlier than age 65, you won't pay a Part A premium. This is sometimes called "premium-free Part A." If you don't qualify for premium-free Part A: You might be able to buy it. You'll pay either $278 or $506 each month for Part A, depending on how long you or your spouse worked and paid Medicare taxes. Remember: You also have to sign up for Part B to buy Part A. If you don't buy Part A when you're first eligible for Medicare (usually when you turn 65), you might pay a penalty.
Deductible	$1,600 for each inpatient hospital benefit period. The way that Original Medicare measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you're admitted as an inpatient in a hospital or SNF. The benefit period ends when you haven't gotten any inpatient hospital care (or up to 100 days of skilled care in a SNF) for 60 days in a row. If you go into a hospital or a SNF after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible for each benefit period. There's no limit to the number of benefit periods. The way that Original Medicare measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you're admitted as an inpatient in a hospital or SNF. The benefit period ends when you haven't gotten any inpatient hospital care (or up to 100 days of skilled care in a SNF) for 60 days in a row. If you go into a hospital or a SNF after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible for each benefit period. There's no limit to the number of benefit periods. Original Medicare A fee-for-service health insurance program that has 2 parts: Part A and Part B. You typically pay a portion of the costs for covered services as you get them. Under Original Medicare, you don't have coverage through a Medicare Advantage Plan or another type of Medicare health plan. Refer to Medicare glossary for more details. There's no limit to the number of benefit periods you can have in a year. This means you may pay the deductible more than once in a year.
Inpatient stay	Days 1-60: $0 after you pay your Part A deductible. Days 61-90: $400 copayment each day. Days 91-150: $800 copayment each day while using your 60 lifetime reserve days. After day 150: You pay all costs.
Home health care	$0 for covered home health care services. 20% of the  Medicare-approved amount  for durable medical equipment (like wheelchairs, walkers, hospital beds, and other equipment)
Hospice care	$0 for covered hospice care services. You may also pay: A copayment of up to $5 for each prescription drug and other similar products for pain relief and symptom control while you're at home.
Hospice care	$0 for covered hospice care services. You may also pay: A copayment of up to $5 for each prescription drug and other similar products for pain relief and symptom control while you're at home. 5% of the Medicare-approved amount for inpatient respite care

Part B costs:	What you pay in 2023:
Premium	$164.90 each month (or higher depending on your income). The amount can change each year. You'll pay the premium each month, even if you don't get any Part B-covered services. You might pay a monthly penalty if you don't sign up for Part B when you're first eligible for Medicare (usually when you turn 65). You'll pay the penalty for as long as you have Part B. The penalty goes up the longer you wait to sign up.
Deductible	$226, before Original Medicare starts to pay. You pay this deductible once each year.
General costs for services (coinsurance)	Usually 20% of the cost for each Medicare-covered service or item after you've paid your deductible (and as long as your doctor or health care provider accepts the Medicare-approved amount as full payment – called "accepting assignment").
Clinical laboratory services	$0 for covered clinical laboratory services.
Home health care	$0 for covered home health care services. 20% of the Medicare-approved amount for durable medical equipment (like wheelchairs, walkers, hospital beds, and other equipment).
Inpatient hospital care	20% of the Medicare-approved amount for most doctor services while you're a hospital inpatient.
Outpatient mental health care	$0 for your yearly depression screening. 20% of the Medicare-approved amount for visits to your doctor or other health care provider to diagnose or treat your condition. If you get your services in a hospital outpatient clinic or hospital outpatient department, you may have to pay an additional amount to the hospital.
Partial hospitalization mental health care	After you meet the Part B deductible: 20% of the Medicare-approved amount for each service you get from a doctor or certain other qualified mental health professional Coinsurance for each day of partial hospitalization services you get in a hospital outpatient setting or community mental health center
Outpatient hospital care	Usually 20% of the Medicare-approved amount for doctor and other health care providers' services. You'll also pay a copayment to the hospital for each service you get in a hospital outpatient setting (except for certain preventive services). In most cases, your copayment won't be more than the Part A hospital stay deductible amount. This additional hospital copayment means you may pay more for an outpatient service you get in a hospital than you'd pay if you got the same service in a doctor's office.

See more details at Medicare.gov

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Another key Medicare coverage area is Part D. This part of the healthcare benefits plan was created to help pay for the costs of medication such as generic and prescription medications. By CMS estimates, the average monthly basic premium for a standard Medicare Part D prescription drug plan in 2023 was expected to be $43.50 a month, up 10% from the previous year. 

Like Part B, premiums for Part D are determined by income levels. For those with higher expected MAGI, these adjusted Part D "surcharges" in 2023 can tack on another $12.20 to $76.40 more a month. 

It's worth noting that IFA Taxes uses specialized software to help individuals and business owners manage their income in more tax-efficient ways. In respect to Part B and Part D Medicare costs, we've found that such a tech-aided analysis can prove especially helpful. Lisa Rimke, who is head of IFA Taxes and a certified public accountant (CPA), provides free initial consultations. She also typically charges on a flat-fee basis rather than by the hour.

The table below provides an overview of Medicare Part D:

Part D (Drug Coverage) costs

See more details at Medicare.gov

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Since Medicare isn't designed to cover everything, you also might want to shop for a private insurance policy. Two basic types of insurance plans are available to cover what Medicare doesn't — by some estimates that coverage "donut hole" amounts to around 20% of a typical person's healthcare needs.  

As a result, a popular insurance option is signing up for what's known as a Medigap healthcare plan. Such Medicare "supplement" plans are sold by insurance companies in a standardized fashion. Services and coverage areas are grouped by letter. (See chart below.) For example, all companies selling Plan G will cover all skilled nursing care coinsurance costs. By comparison, those opting for Plan K will typically get 50% of such expenses covered. 

Buying a Medigap plan might mean you're still going to need to pay at least a portion (if not all) of any Part B monthly premium. You're also likely to need to purchase a Part D policy, which might be cheaper if purchased through a different insurer than the one you choose for your broader Medigap plan. 

Making choices in supplemental plans comes down to deciding which letter-grade plan is best suited to your coverage requirements. Also, these grades will effectively make certain grades more or less expensive than others. And, too, different insurance carriers will charge varying monthly premium rates within the same grades in your area. 

Another caveat: In most cases, Medigap policies only cover coinsurance after you've paid the deductible. By coinsurance, we're referring to the amount you're required to pay after any deductible amount is paid (by you). The table below compares Medigap plan features. (Note: Medigap policies are standardized in different ways for those who live in Massachusetts, Minnesota or Wisconsin.)

See more details at: Compare Medigap plans side-by-side

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Notice how we skipped Medicare's Part C coverage earlier in this report. That's because it represents a different sort of animal. Such a coverage option is essentially "farmed out" by the government to private healthcare providers such as Kaiser Permanente and Anthem Blue Cross, among others. This means billing and service questions and issues are handled through your Part C provider, not a government office. These are known as Medicare Advantage plans, and aim to provide "all-in-one" coverage for those age 65 or older.

Traditionally, MA plans have included coverage of Part D-related drug prescription costs, according to Medicare officials. Some MA plans also cover most of Part B costs, but such a benefit is dependent on rules in your area of coverage. If this turns out to be the case in the place you live and will receive coverage, then you might not to need to pay Part B and Part D premiums for choosing such an alternative to Medigap policies.

Of course, MA plans can offer a range of different services. The lowest premiums are usually charged by those coming with restrictions on doctor networks and operate much like an HMO. Some Medicare Advantage plans, however, do offer PPO-like benefits that are less restrictive in terms of expanding a patient's choices in seeking care from different hospitals, doctors and clinics that might not be considered as "in-network" providers in the HMO version.

These additional benefits come at a higher premium rate and can vary greatly across insurance provider networks as far as specific doctors and facilities counted as in- and out-of-network.

In order to help you sort through all of the different Medicare options, IFA's wealth advisors might be able to offer a reference to an insurance brokerage that works on a flat fee (rather than commission) basis. Also, we can get you in touch with Lisa Rimke, our in-house CPA and her staff. She can be reached directly at: [email protected]. Her toll-free phone number is: (888) 302-0765.

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