Medicare Costs 2018

Medicare can come with many unexpected costs. Let us help you form a Medicare cost estimate.

Cost for Part A– 2018

Most beneficiaries do not pay a premium for Medicare Part A. Individuals typically pay taxes throughout their lifetimes to be able to qualify for Medicare Part A entitlement.

If you have worked for 10 years in the U.S., you will generally pay nothing at all for this Part. If you do not have this work history, you can purchase coverage. In 2018, the monthly premium is $422. People who have worked for fewer than 40 quarters but more than 30 quarters can get a pro-rated monthly premium of $232.

In 2018, your Part A Deductible will $1340 for a hospital stay. If you have a Medigap plan, this cost may be covered

 

Costs for Part B– 2018

Your Part B premium for 2018 is based upon your Modified Adjusted Gross Income (MAGI) of your household. The Social Security Office uses your tax return from two years ago to determine your costs for Parts B and D. These are referred to as IRMAA (Income-Related Monthly Adjustment Amount) costs.

Any money earned through wages, interest, required minimum dividends from investments, and capital gains contribute to your MAGI. It also includes Social Security benefits and tax-deferred pensions. Distributions from Roth IRAs and Roth 401(k)s, life insurance, reverse mortgages and health savings accounts do not count in the MAGI calculation.

If you filed with a spouse, Social Security will base your premiums for each of you based on your married income. However, you will each pay an individual Part B premium. Social Security figures out which premium level you fall under based on your joint income. However, you pay your own premium.

Social Security will alert you by mail of next year’s premium in December or early January.

 

Standard Part B Premium

Most people new to Medicare in 2018 pay a monthly premium of $134 for Part B. Social Security will deduct your Part B premium from your Social Security check monthly. If you have not enrolled in Social Security income benefits yet, they’ll bill you quarterly. The Medicare Part B deductible for 2018 is $183 per year.

You’ll pay the standard Medicare Part B premium amount if:

  • You enroll in Part B for the first time in 2018
  • You don’t receive Social Security benefits
  • You’re directly billed for your Part B premiums.
  • You have Medicare and Medicaid (Medicare pays your premiums). (Your state will pay the standard $134 premium.)
  • Your MAGI is above a certain amount– you’ll pay the standard premium amount and IRMAA.

 

Can You Pay Less for their Medicare Part B Premium?

If you get Social Security benefits you will still pay less than $134. This is because the cost of Medicare Part B cannot increase more than the Social Security annual cost-of-living increase. In recent years, we have had low or no COLA increase, so these individuals have only been paying around $109/month.

 

Medicare Cost for Part D in 2018

Just like Part B, your Medicare costs for Part D vary based on income. Your Medicare Part D Premiums for 2018 also vary by plan.  The base premium for Part D is around $20/month.

You will pay the plans published base premium unless you are in a higher income bracket. People with higher incomes pay more for Part D. It’s important to factor this in if you are comparing the potential costs for Medicare Part D against other insurance, such as employer insurance.

Medicare Part D Premiums Chart

The table below shows what IRMAA you would pay based on your individual and joint tax return:

 

medicare part d premiums 2018

 

Are Medicare’s Premiums Tax Deductible?

Medicare premiums may be tax deductible as part of your medical expenses. You can deduct them if your total medical expenses are greater than 10% of your Adjusted Gross Income. Always consult a tax professional for guidance before deducting Medicare premiums or any other medical expenses.