Understanding the Medicare Deductibles: Part A and Part B

When it comes to healthcare coverage through Medicare, understanding the deductibles and what they cover can set you on the path to financial preparedness. This article will help you navigate the nuances of Medicare Part A and Part B deductibles, along with the implications of different types of Medicare plans. By the end, you'll have a clear understanding of what to expect and how to be financially prepared.

Medicare Costs at a Glance

Medicare is a federally funded health insurance program for people aged 65 and older, as well as those with certain disabilities. It is divided into four parts, with Parts A and B being the most relevant to the subject of deductibles. While the Medicare website is a valuable resource for all Medicare information, understanding the key details can save you time and money.

According to the latest figures, the Medicare Part B deductible for 2019 was $185. This amount often leads individuals to question the financial implications of their chosen Medicare plan. For those who opt out of Medicare Supplement plans (Medigap) or Medicare Advantage plans (MA Plans), the potential for higher out-of-pocket costs can be considerable.

Understanding Medicare Part A and Part B Deductibles

Medicare Part A Deductibles and Coinsurance

Medicare Part A covers hospital stays and is subject to a deductible and coinsurance. For the years 2018 and 2019, the Part A deductible was $1,340 and $1,364, respectively. Here's a breakdown of the costs:

Inpatient hospital deductible: $1,340 (2018) / $1,364 (2019) Daily coinsurance for days 61-90: $335 (2018) / $341 (2019) Skilled nursing facility coinsurance: $167.50 (2018) / $170.50 (2019) Coininsurance for days 91-150: $670 (2018) / $682 (2019)

These annual deductible amounts can vary based on the type of costs involved and the length of stay.

Understanding the Per Benefit Period Rule

The per benefit period rule for Medicare Part A is a unique aspect of the program. A benefit period begins when you have been in an inpatient facility for at least 60 days or upon readmission within 60 days of discharge. Here's how the rule works:

Days 1-60: No coinsurance and a deductible of $1,316 (2017) / $1,364 (2019) Days 61-90: A daily coinsurance of $329 Days 91-150: A daily coinsurance of $659 Lifetime Reserve Days: A daily coinsurance of $658 after 90 days, up to 60 days over a lifetime

This structure ensures coverage for up to 90 days without additional charges, and then moves to coinsurance. It's important to note that if you are readmitted within 60 days of discharge, you remain in the same benefit period, thus retaining the 60-day coverage and avoiding the initial deductible.

Medicare Part B Deductibles and Copays

In contrast to Medicare Part A, Part B has a more straightforward deductible structure. For the year 2019, the Part B deductible was $189. Unlike Part A, Part B covers various outpatient medical services and has a different copayment structure:

Yearly deductible: $189 (2019) Co-insurance: 20% of the allowable charges, with Medicare covering 80%

This system ensures that beneficiaries only pay 20% of the allowable charges, minimizing the potential financial burden.

Choosing the Right Medicare Plan

The type of Medicare plan you choose can significantly impact your out-of-pocket costs. Here is an overview of the different Medicare plans:

Original Medicare (Parts A and B): With only Parts A and B, you will need to be vigilant about coverage gaps and consider a Medicare Supplement Insurance (Medigap) plan or a Medicare Advantage (MA) plan. Medicare Supplement Insurance (Medigap): These policies fill in the coverage gaps of Original Medicare A and B. There are 10 standardized plans (A through N), each with different benefits. Medicare Advantage (MA) Plan: These plans are offered by private insurance companies and include all Part A and B benefits. They may also include additional coverage such as prescription drugs, vision, and dental.

Choosing the right plan typically depends on your health needs, preferences, and budget. Consulting with a Medicare enrollment specialist or doing your research can help you make an informed decision.

In summary, understanding the Medicare deductibles for Part A and Part B is crucial for managing your healthcare costs effectively. By familiarizing yourself with the rules and structures, you can prepare financially for the healthcare expenses you may face under the Medicare program.