Understanding your Medicare coverage costs is an important part of the coverage selection and enrollment process. By knowing what your costs will be BEFORE you enroll in a plan, you can avoid receiving unpleasant bills in the mail that you weren’t expecting.
Your Medicare costs will vary depending on where you live, your income, the specific plan you select and the out-of-pocket expenses relating to your plan. Additionally, you could qualify for programs that will provide financial assistance and offset some or all of these expenses. If you think you are eligible for financial assistance, contact your local Medicaid office to gather more information.
The associated Medicare coverage costs you might have to pay include:
Premiums – The set amount that you are required to pay out-of-pocket monthly, whether through your checking account or Social Security check, for Medicare Part B, Medicare Advantage (Part C), your Medicare Part D prescription drug plan and/or your Medicare Supplement plan.
Deductibles – The set amount that you are required to pay out-of-pocket for covered services before your insurance plan begins to provide benefits.
Coinsurance/Copayments – The portion of the medical services or prescription drugs that you are responsible to pay. Copayments are fixed dollar amounts; in comparison, coinsurance is calculated as a percentage.
Premiums for Part A
For most, the premium for Part A is zero because you’ve already paid for it through FICA taxes, which were deducted from your paycheck each month while you were working.
However, if you do have to pay Part A premiums because you worked less than the required 40 quarters, you can possibly get a pro-rated premium which can lower your monthly cost. Typically, those who worked between 30 and 40 quarters would receive a pro-rated premium of $259/month for 2021.
If you have no work credits, your Medicare Part A premium for 2021 is $471/month.
Deductibles for Part A
For 2021, there is a $1,484 deductible if you experience a hospital stay, which is referred to as a hospital benefit period. A hospital benefit period begins when you check into a hospital or skilled nursing facility (SNF) and ends 60 consecutive days after you have been discharged from either the hospital or SNF. (If you purchase a Medigap/Medicare Supplement plan, your plan should cover this cost for you).
Coinsurance/Copayments For Part A
After the deductible, there is no initial copay or coinsurance for your first 60 days of stay in a benefit period. However, if your stay extends past 60 days, you are required to pay a copayment for Part A. In 2021, for example, days 61-90 require a $371/day copayment.
In a skilled nursing facility, you are required to pay a copayment if your stay exceeds 20 days. From days 21-100 in 2021, your copayment would be $185.50/day, and from days 101 and beyond, you would be responsible for all costs.
For a hospital stay in 2021, you are required to pay a deductible of $1,484.
This is not an annual deductible, and you’re required to pay this fee for each separate hospital benefit period.
Your payment can vary depending on the length of your hospital stay. Please note that if you have a Medicare Supplement plan, the copayment/coinsurance for your hospital stay might be covered.
Skilled Nursing Facility Stays
Medicare does not charge a deductible for a skilled nursing facility stay. From days 21-100 in 2021, your copayment would be $185.50/day, and from days 101 and beyond, you would be responsible for all costs. However, they will only cover up to a maximum of 100 days, and only if you meet the following criteria:
- You must be admitted in to the hospital for a minimum of three (3) days.
- You must be admitted to the hospital as an inpatient. Just going to the emergency room or being in “observation status” is not applied towards your three-day requirement.
- You must have had Medicare Part A coverage during the time you were in the hospital as Part A covers your hospital stay.
- Your physician must determine that you need skilled nursing care at a minimum of seven (7) days a week, or skilled therapy services for a minimum of five (5) days a week. Note: Medicare will not cover your stay if you just need help with personal care, such as eating, dressing and bathing.
- Your admittance in to an SNF must be within 30 days of your hospitalization.
Home Healthcare Services
You don’t have to pay a deductible or copayment for home healthcare services. However, Medicare will only cover these costs if you meet ALL of the following criteria:
- You’re under the care of a physician.
- You’re homebound.
- You need part-time skilled medical care.
- You need skilled care from a nurse and/or a speech, physical, or occupational therapist.
Note: Your physician may recommend that you receive services that are more frequent or out of the scope of what Medicare covers. In this situation, you run the risk of having to pay all or a portion of the costs.
It’s up to you to ask questions so that you understand why your doctor is recommending certain services, what you’ll be responsible paying for and if Medicare will cover these costs.
You’re not required to pay a deductible or copayment for hospice care. Your Medicare coverage requires you to pay only a small portion of the costs for medications and inpatient respite care. Medicare will cover the remaining costs if the following criteria is met:
- Your physician has confirmed and certified your illness is terminal and your life expectancy is 6 months or less.
- You’ve accepted palliative care and no longer seek care to cure your illness.
- You’ve signed a statement acknowledging your choice to accept Hospice care and no longer seek alternative treatments to cure your illness.
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