Parts A and B is what is known as “Original Medicare.” Part A is referred to as hospital insurance. It will help pay for your room and board costs during a hospital stay and short term skilled nursing facilities. Many beneficiaries receive premium-free Part A. As long as you paid Medicare taxes for ten years or forty quarters, you will not pay a monthly premium. However, there is a deductible. The current Part A deductible is $1600 per benefit period (2024 it will be $1632). A benefit period begins the day you go into a hospital or skilled nursing facility and then restets when you have been out for 60 days in a row. If you go back into the hospital after 60 days, then a new benefit period starts, and the deductible happens again. Your coinsurance costs with Part A will depend on how many days you stay in the hospital. For the first 60 days, you have no coinsurance costs. But that changes after the second stay.

Part B of Medicare is knowns as your medical or outpatient insurance. As the name implies, it covers many outpatient services such as visits to your doctor, surgeries, diagnostic tests and images, durable medical equipment (DME), and many preventive services. Part B does have a base monthly premium of $164.90 (2024 it will be $174.10). This is the current rate for 2023, and it is subject to change each year. While most beneficiaries pay this amount, some pay an adjusted amount called the Income-Related Monthly Adjustment Amount or IRMAA. You will pay IRMAA if your income is above a certain threshold. The Part B deductible is currently $226 (2024 it will be $240) and unlike the Part A deductible, the part B deductible is applied annually. Once the deductible is met, most of your outpatient expenses will be covered at approximately 80%.