Medicare vs. Private Insurance: Costs
When it comes to Original Medicare, the costs associated are fairly clear-cut and uniform. Most individuals qualify for premium-free Medicare Part A and pay a standard Part B premium ($170.10 in 2022). In addition to premiums, you’ll pay the following in 2022 for Medicare costs:
- Part A deductible: $1,556
- Part B deductible: $233
- Part A co-pays
- Hospital days 60-90: $389 per day
- Hospital days 91-120: $778 per day
- Skilled nursing facility days 21-100: $194.50
- Part B coinsurance: 20% of the Medicare-approved amount
- Part B excess charges: Up to 15% over the Medicare-approved amount
However, with Medicare, you can enroll in a Medicare Supplement plan to cover most if not all of these costs. The nationwide average premium for these plans is about $150 per month.
In addition to Medicare Supplement insurance, you can elect to enroll in Medicare Part C. These plans work similarly to private insurance and combine your Medicare benefits into one program. Similar to Original Medicare, these plans have copays, coinsurance, and out-of-pocket expenses.
Private health insurance varies widely in terms of costs and out-of-pocket expenses. Prices for private insurance can include premiums, copays, coinsurance, deductibles, and out-of-pocket maximums. All of these potential costs will vary depending on the plan; however, you’ll most likely pay more in terms of monthly premiums.
While most people will pay no monthly premium for Medicare Part A, individuals with an income greater than $91,000 annually ($182,000 for couples) will have to pay a significantly higher premium for Medicare Part B. For example, a person who makes between $114,000 and $142,000 annually will have to pay $340.20 for monthly Part B premiums in 2022.
Depending on your income, Medicare Part B can become as costly as private insurance.
||Average monthly premium*
|Medicare Part A
|Medicare Part B
|Medicare Part D
* These premiums reflect a rough average; however, premiums can vary greatly by age, location, plan type, and — in the case of Medicare — income.