Medicare Part A Costs in 2016

How to Budget Your Health Expenses

Part A Medicare Costs in 2016
Know how much you could pay for Medicare Part A in 2016.. Vstock LLC/Getty Images

Congress has announced Medicare costs for 2016. Everyone, regardless of their income, will be subjected to increases in out of pocket spending. Use these numbers to guide your healthcare expenses in the new year.

Part A Premiums

Medicare Part A is premium-free for 99 percent of Americans. This is because most people have paid into the system for years with employee taxes for both Medicare and Social Security.

If someone has not contributed 40 quarters (10 years) or more of Medicare taxes, however, they will be required to pay premiums for Medicare as follows.

2016 Part A Premiums
Quarters of Medicare Taxes Paid Your 2016 CostsChange from 2015
40 quarters or more$0 per month----
30-39 quarters

$226 per month

$3,192 per year

$2 increase per month

$24 increase per year

0.9 percent increase

Less than 30 quarters

$411 per month

$4,932 per year 

$4 increase per month

$48 increase per year

1.0 percent increase

It is in your best interest to work up to 40 quarters if possible. This could mean delaying your retirement until you have met enough quarters of federally taxed employment. Please note that any pay you receive "under the table" will not count towards your eligibility for free Part A premiums since there were no documented taxes.

If you or your spouse work 40 or more quarters, it could save you tens of thousands of dollars in Part A premiums over your lifetime.

This could have a significant impact on your ability to retire comfortably.

Part A Deductibles and Copayments

Hospital costs and skilled nursing facility costs, not surprisingly, are on the rise. They increase every year and 2016 was no exception.

A flat deductible rate is charged for each inpatient admission.

This deductible covers all costs up to 60 days with the exception of physician charges which are covered by Part B. After 60 days, you are charged a copayment for each additional day you are hospitalized.

2016 Part A Inpatient Hospital Stay Costs
Day of Inpatient Hospital CareYour 2016 CostsChange from 2015
Inpatient hospital deductible days 0-60$1,288 per hospital stay

$28 total increase

2.2 percent increase

Inpatient hospital copayment days 61-90$322 per day

$7 per day increase

2.2 percent increase

Inpatient hospital copayment days 91+$644 per day

$14 per day increase

2.2 percent increase

There has never been a deductible for a skilled nursing facility stay (SNF). You are granted 20 days of SNF care free of charge. For Part A to cover such a stay, you first have to have been admitted to the hospital as an inpatient.

2016 Part A Skilled Nursing Facility (SNF) Costs
Day of SNF CareYour 2016 CostsChange from 2015
SNF days 0-20$0No change
SNF days 21-100$161 per day

$3.50 per day increase

2.2 percent increase

SNF days 100+All costs paid out of pocket by beneficiaryNo change

Cost Summary

If you are lucky, you will never need to use Medicare Part A. You would never need hospitalization, you would never need a skilled nursing facility and you would never need hospice. Ultimately, it is important to have this coverage should you ever need it and to know how much it would cost.

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