The question I usually get from new Medicare beneficiaries is how much does Medicare cost? Or, what do I have to pay when I go to the doctor? I can answer that question directly and tell you what the costs are this year but the actual dollar amounts could change incrementally almost every year, so it makes more sense to discuss the Medicare cost structure because when you understand that you can plug in the updated costs as they change. Here it goes.
Medicare Parts A and B have monthly premiums. However, if you worked in the United States for at least ten years or 40 quarters, paying the Medicare tax the whole time, you get Medicare Part A for free, and Part B will cost you $134 per month in 2018. Some people with high incomes can pay more.
Medicare Parts A and B have deductibles, copays, and coinsurances like any other health insurance policy. Here is the basic outline of Medicare’s cost-sharing.
Medicare Part A: Hospital Coverage, Home Health Care, Hospice, And Skilled Nursing Facility
Medicare Part A has a deductible, then per-day copays after the first 60 days. The copays continue all the way up to 150 days after that you pay all costs.
The Medicare Part A deductible is per benefit period rather than the calendar year. The Medicare Part A benefit period begins on the first day of hospital admission, and it ends when sixty consecutive days have passed after your discharge from the hospital. If you are re-admitted within 60 days of your discharge, then you are still in the same benefit period as the initial hospital confinement. If you are re-admitted after 60 days of discharge then you can potentially pay the deductible again.
2018 Part A Hospital Confinement Cost Sharing:
Days 1-60: you pay nothing
Days 61-90: $335 per day copay
Days 91-150: $670 per day copay (lifetime reserve days)
After 150 days: you pay all costs
Home Health Care
Under Medicare Part A, if you qualify for home health care, Medicare will pay all costs, and you pay nothing. However, a person in need of home health care might need durable medical equipment like an oxygen tank or a hospital bed in their home. Durable Medical equipment is covered under Medicare Part B and subject to the Part B deductible and coinsurance.
Medicare pays all cost for hospice care, except for prescriptions and respite care. A small copay of no more than $5 for prescriptions and up to 5% of the Medicare-approved cost of respite care.
Skilled Nursing Facility
You pay nothing for the first 20 days of a skilled nursing facility stay. Days 21-100 have a per day co-payment. In 2018 the co-payment is $167.50. Beyond 100 days you pay all costs.
Medicare Part B: Doctors Services, Outpatient Therapy, and Durable Medical Equipment
Medicare Part B has an annual deductible, after that, you pay 20 percent of all of your Medicare Part B services and equipment, and Medicare will pay 80 percent of the cost.
In 2018 the Part B deductible is $183.
Pay more attention to the structure of Medicare costs because it is least likely to change. The actual dollar amounts are updated almost every year, but if you understand what the structure is and how it relates to what you pay, then you’ll be on your way to understanding Medicare in a comprehensive way, and that will help you to make better Medicare decisions.
I hope this was helpful, good luck on your Medicare journey.