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There are numerous out-of-pocket expenses Medicare beneficiaries are liable for, the most common being copays, coinsurance, and deductibles. The last component is often the most significant in terms of a beneficiary’s health and finances.
Understanding Medicare deductibles and how they relate to your particular Medicare plan is an all-important consideration. In this article, we analyze Medicare deductibles and explore ways of saving money on Medicare-related costs.
What Are Medicare Plan Deductibles?
A deductible is the initial amount a Medicare beneficiary must pay out of pocket before their insurance coverage kicks in. It is applicable whenever a beneficiary requires a medical service, equipment, or prescription drug. Deductibles are a way of splitting the cost of healthcare services between the beneficiary and the insurer.
Medicare administrators, which may be a public entity like the CMS or a for-profit insurance provider, determine a plan’s annual deductibles. Depending on the particular Medicare plan, deductibles can range from a few hundred dollars to several thousand.
Medicare will start paying its part of the costs only once you’ve met your deductible and the fee schedule has started.
Let’s understand Medicare deductibles under each plan:
| Medicare plan | Deductible |
| Part A (inpatient care) | Each hospital benefit period will cost $1,632. |
| Part B (outpatient care) | $240 annually |
| Part C (Medicare Advantage bundle) | Varies depending on the plan, from $0 to over $1,000. |
| Part D (prescription drugs) | Varies depending on the plan and is limited to $545 |
| Medigap (Medicare supplement) | Plans can lower the Part A and B deductibles and typically have no deductible. |
Understanding Medicare Part A Deductible
Medicare Part A covers inpatient hospital stays, nursing and hospice care, and limited home health services.
Explanation of Medicare Part A Deductibles In 2024
Medicare deductibles are subject to change every year due to inflation and other adjustments.
In 2023, the Medicare Part A deductible stands at $1,632 and is applicable for each hospital benefit period. You do not pay any Medicare Part A costs after meeting the Part A deductible until day 61 of your hospital stay. Extended stays past this period can cost several hundred dollars per day.
Medicare Part A coinsurance for hospitalization:
- Days 1 through 60: $0 following the initial $1,632 deductible payment.
- Days 61 to 90: $408 daily.
- Days 91 through 150: $816 per day.
- All costs after day 150.
If you need to transfer to a Skilled Nursing Facility after admission to the hospital, here is what you are liable for:
- $0 for the first 20 days of each benefit period.
- $204 per day for days 21–100.
- All costs for each day after day 100.
Understanding Medicare Part B Deductibles
Medicare Part B consists of medical insurance that covers doctor’s services, outpatient care, medical supplies, and preventive services. This critical aspect of Medicare ensures comprehensive coverage for various healthcare needs.
Explanation of Medicare Part B Deductibles In 2024
The Medicare Part B deductible in 2024 is $240. Contrary to Part A, you need to pay for the Part B deductible only once every year.
Once you’ve met the Part B deductible, Medicare will pay 80% of healthcare costs, while the beneficiary pays for the remaining 20% and any applicable excess charges. Medicare Part B deductibles are also subject to change every year.
Medicare Advantage Deductibles
Medicare Part C or Medicare Advantage plans are a way to receive Medicare benefits through private insurance companies. Under federal law, Medicare Advantage plans must provide all the benefits of Original Medicare (Part A and Part B), with the scope for additional benefits.
These plans often bundle Original Medicare Part A, Part B, and sometimes Part D coverage, but do they come with deductibles?
There are usually no deductibles for hospital and medical services in Medicare Advantage plans, except in rare cases.
Medicare Part D Deductibles
Medicare Part D covers prescription drug costs and is operated through private insurance plans approved by Medicare.
The maximum deductible for a Medicare Part D plan is $545 per annum in 2024. A small proportion of Medicare Part D plans do not have deductibles.
Many Medicare beneficiaries purchase a Part D plan because Original Medicare does not cover the cost of prescription drugs. Of the 66 million Medicare beneficiaries in 2023, almost 50.5 million were also enrolled in Medicare Part D.
Medigap Plans: Reducing Medicare Deductible Costs
Medigap plans are private insurance policies designed to supplement original Medicare coverage by filling coverage gaps in Medicare Part A and Part B. They cover the cost of Part A and Part B deductibles but usually do not have deductibles of their own.
All Medigap plans provide Part A coinsurance and hospital costs for an additional 365 days after Medicare benefits have been used up.
Medigap plans B, C, D, F, G, and N cover the Medicare Part A deductible cost, while other plans cover only a portion. On the other hand, Plans C and F are the only Medigap policies that cover the Medicare Part B deductible. These two plans, however, are no longer available to Medicare beneficiaries who enrolled on or after 1 January 2020.
Medigap plans can impact the way Medicare deductibles impact beneficiaries. They can bring financial relief and deserve careful consideration.
Standard Medicare Coverage Information for Beneficiaries
Understanding Medicare deductibles is paramount for eligible senior citizens and those with covered conditions.
The complex character of Medicare rules and regulations can make it difficult for many to navigate it. That’s why CoverRight offers concierge services to assist you with all your Medicare needs – from research to evaluation and enrollment.
