Number of People Receiving Medicare (2019): *

Total Medicare beneficiaries

• Aged

• Disabled

  61.2 million

• 52.6 million

•   8.7 million

Part A (Hospital Insurance, HI) beneficiaries

• Aged

• Disabled

  60.9 million

• 52.2 million

•   8.7 million

Part B (Supplementary Medical Insurance, SMI) beneficiaries

• Aged

• Disabled

  56.1 million

• 48.2 million

•   7.9 million

Part C (Medicare Advantage) beneficiaries   22.2 million
Part D (Prescription Drug Benefit) beneficiaries   47.2 million
  • Totals may not add due to rounding.

Medicare Eligibility:

  • Individuals ages 65 and over, who are eligible for Social Security payments
  • Individuals under 65 with a disability, who receive Social Security cash payments
  • People of all ages with end-stage renal disease

Average Benefit per Enrollee (2019):

Total: $14,151

  • Part A: $5,365
  • Part B: $6,617
  • Part D: $2,168

Status of Medicare Trust Funds (2019): *

Medicare Trust Funds (billions): HI (Part A) SMI

(Part B) (Part D)

Total
Assets at end of 2018 $200.4 $96.3   $8.0 $304.7
Total income in 2019

Payroll taxes
Interest
Taxation of Benefits
Premiums
General Revenue/Other

$322.5

 

$285.1
6.5
23.8
3.9
3.1

     $373.6  $98.7

 

—– —–
2.6   0.1
— — —–
99.4    15.8
271.6    82.9

$794.8

 

$285.1
9.1
23.8
119.1
357.7

Total expenditures in 2019

Benefits
Administrative Expenses

$328.3

 

$322.8
5.5

$370.3  $97.6

 

$365.7 $97.1
4.6     0.5

$796.2

 

$785.6
10.6

Net change in assets -$ 5.8        $    3.3  $ 1.2 $   1.4
Assets at end of 2019 $194.6 $  99.6 $  9.2 $303.3

 

*Totals may not add due to rounding

Medicare Part A

Medicare Part A (HI) Financing and Tax Rate:

Financing: Primarily financed by payroll taxes

  • Tax rate paid by employee: 1.45%
  • Tax rate paid by employer: 1.45%
  • Total tax rate paid by both employer-employee: 2.90%
  • Total tax rate paid by self-employed: 2.90%
  • Beginning in 2013, workers pay an additional 0.9 percent of their earnings above $200,000 (for those who file an individual return) or $250,000 (for those who file a joint income tax return)

Medicare Part A Benefits (2020):

Hospital Benefits – Initial deductible: $1,408

– Daily co-insurance:

·         $0 (1st ~ 60th day)

·         $352 (61st ~ 90th day)

·         $704 (91st ~ 150th day, lifetime reserve days)

Skilled Nursing Facility Benefits – Deductible: $0

– Daily co-insurance:

·         $0 (1st ~ 20th day)

·         $176 (21st ~ 100th day)

·         – No benefits starting the 101st day

Home Health Services Benefits – No deductible

– 20% of Medicare –approved amount for durable medical equipment

Hospice Benefits – Deductible: $0

– Up to $5 co-payment per prescription for outpatient drugs for pain and symptom management

 

Medicare Part B

Financing:

  • About 25% by monthly premiums;
  • About 75% from general federal revenues

Medicare Part B Benefits (2020):

Coverage: Physician and outpatient care, medical supplies, home health, and preventive services
Standard Monthly premiums: The standard Part B premium is $144.60.  Monthly premiums have been means-tested since 2007.

If Your Yearly Income in 2018 was You Pay
File Individual Tax Return File Joint Tax Return
$87,000 or below $174,000 or below $144.60
$87,001 – $109,000 $174,001 – $218,000 $202.40
$109,001 – $136,000 $218,001 – $272,000 $289.20
$136,001 – $163,000 $272,001 – $326,000 $376.00
 $163,001 – $500,000

 

 $326,000 – $750,000

 

$462.70
Above $500,000 Above $750,000 $491.60
Initial deductible: $198.00
Co-pay: 20% of covered expenses
Penalty for late enrollment: 10% of monthly premium for each full 12 months of late enrollment for life (Exception: late enrollment due to cancellation of an employer-sponsored group insurance)

 

Medicare Part D

Financing:

  • About 16% by monthly premiums
  • About 71% from general federal revenues
  • About 13% from state payments, interest and court settlements

Medicare Part D Benefits (2020):

Coverage: Outpatient prescription drugs
Monthly premiums: The national base beneficiary premium for 2019 was $32.74. As of 2011, monthly premiums are means-tested.

If Your Yearly Income in 2018 was You Pay
File Individual Tax Return File Joint Tax Return
$87,000 or below $174,00 or below Plan Premium
$87,001 – $109,000 $174,001 – $218,000 $12.20+Plan Premium
$109,001 – $136,000 $218,001 – $272,000 $31.50+Plan Premium
$136,001 – $163,000 $272,001 – $326,000 $50.70+Plan Premium
 $163,000 –

$500,00

 $326,001 –

$750,000

$70.00+Plan Premium
Above

$500,000

Above

$750,000

$76.40
Annual deductible $435*
Co-insurance: 25% of drug costs between $435 and $4,020*:
Coverage gap: 25% out-of-pocket spending for generic drug costs between $4,020-$6,350*. A 75% discount is available on covered brand-name prescription drugs at the time of purchase.
Extra help: Benefit for people with income less than $19,140 for an individual ($25,860 for a married couple living together) and up to $14,610 in resources ($29,160 for a married couple).
Note: Individual states might apply different criteria for extra help.
Penalty for late enrollment: 1% of the national average premium for each month not enrolled for life (Exception for late enrollment due to having prescription drug coverage that is as good as Medicare’s).

 

* Varies by individual plans and indexed to the annual percentage increase in Part D expenditures thereafter.

Supplemental Insurance

Medigap:

  • Each state offers up to 10 standard plans.
  • Starting June 1 2010, plans E, H, I, or J are no longer available to buy. People who already have one of these plans can continue with it. Also, Plans M and N are policies introduced in 2010.
  • 29% of all Medicare beneficiaries have a Medigap policy.

Medicare Savings Programs:

Benefit for dual eligibles (those who qualify for Medicare and Medicaid benefits):

  • 20% of Medicare beneficiaries received Medicaid in 2017.
Qualified Medicare Beneficiaries
(QMBs)
– Entitled to Medicare Part A

– Asset test

·         Not exceeding $7,860 for an individual;

·         Not exceeding $11,800 for married couples

– Monthly income limit: Most states: $1,084 for an individual or $1,457 for a couple

– Coverage: Medicare Part A & B premiums, deductibles and coinsurance.

Specified Low-Income Medicare Beneficiaries (SLMBs) – Entitled to Medicare Part A

– Asset test:

·         Not exceeding $7,860 for an individual;

·         Not exceeding $11,800 for married couples

– Monthly income limit: Most states: $1,296 for an individual or $1,744 for a couple

– Coverage: Medicare Part B premiums only

Qualifying Individuals
(QIs)
– Limited number of beneficiaries per year

– Entitled to Medicare Part A

– Asset test:

·         Not exceeding $7,860 for an individual;

·         Not exceeding $11,800 for married couples

– Monthly income limit: Most states: $1,456 for an individual or $1,960 for a couple

– Coverage: Medicare Part B premiums only

Medicaid Only
(Non QMB, SLMB, or QI)
– Entitled to Medicare Part A and/or Part B and are eligible for full Medicaid benefits

– Typically, these individuals need to spend down to qualify for
Medicaid or fall into a Medicaid eligibility poverty group

– Coverage: Full Medicaid benefits, Medicare cost-sharing
liability

Note: Individual states might have less restrictive criteria for dual eligibility.

Medicare Advantage (MA):

  • Eligibility to choose a MA plan: People who are enrolled in both Medicare A and B, pay the Part B monthly premium, do not have end-stage renal disease, and live in the service area of the plan.
  • Formerly known as Medicare+Choice or Medicare Health Plans.
  • Benefits are provided by private insurance companies.
  • Premiums, cost sharing, and coverage vary by plan.
  • 1 million enrollees (36% of all Medicare enrollees) in 2020.

Government Relations and Policy, August 2020