If you’re looking for a Medicare plan, it’s important to understand the terms that define your out-of-pocket costs. Here’s a look at what Medicare deductibles, coinsurance, and copays are and how they’ll affect your budget.
Medicare deductibles are the amount of money you pay out-of-pocket before your benefits kick in. Part A, Part B, and some Part D plans each have their own deductibles and rules they follow for how they function. You should know that deductibles (as well as coinsurance rates) are adjusted each year according to the Social Security Act. For this article, the specific prices we discuss will be for 2022.
In 2022, the Part A deductible is $1,556 per benefit period. You must meet this deductible before Medicare pays for any Part A services with each benefit period. A benefit period begins the day you are admitted to the hospital and ends when you have gone 60 full days without any covered inpatient hospital or skilled nursing facility care. If you were to be readmitted after 60 days, a new benefit period would start and you would be responsible for meeting the deductible again.
For Part B, your deductible is $233. Unlike Part A where you have to pay the deductible each benefit period, you only have to pay it once each calendar year. A Medigap plan may be able to cover your Part B deductible, but if you want to go without Medigap, Medicare Part B will not pay for your outpatient health care services until you’ve paid the deductible with your own money.
Some Part D Prescription Drug plans also have annual deductibles. Since they vary, we have no set amount to report to you. These amounts you must pay out-of-pocket before your plan pays for your care.
Coinsurance is your share of a covered health care expense and is usually expressed as a percentage. Medicare coinsurance can also be broken down by Part A and Part B.
Part A is a little strange and doesn’t use percentages but rather fixed dollar amount for covered inpatient days. For hospital and mental health facility stays, you pay nothing for the first 60 days. From days 61 through 90, you pay $389 per day. From day 91 and beyond, you pay $778 per day until you’ve exhausted your lifetime reserve days (you get 60 lifetime reserve days throughout your life). After you use those days up, you pay the full cost of your inpatient care.
For Part B, once the deductible is met, you may be responsible for 20% of the Medicare-approved amount for most covered services. The Medicare-approved amount is the amount a doctor or supplier that accepts assignment can be paid.
A Medicare copay is the fixed dollar amount you pay for a healthcare service, regardless of what the provider charges. Copays may or may not count toward your annual plan deductible if you have one, but they do count toward your maximum out-of-pocket limit.
Part D plans frequently use a copay system. Some plans use a “tiered” copay schedule, where generic and cheaper drugs have a lower copayment and more expensive drugs have a higher copayment.
Jeffery Insurance is Here to Help
We know that understanding Medicare deductibles and copays can be confusing, but we are always here to help you. At Jeffery Insurance, we can answer any questions you may have and help you find the right plan. No matter your budget or lifestyle! We are based in Scottsdale but are happy to assist you no matter where you are in Arizona. We are Arizona’s health care resource!