What is Medicare Cost Sharing?
- Medicare beneficiaries share costs with the federal government and health plans for coverage:
- Medicare Part A: government pays 80%, beneficiary pays 20% co-insurance + deductibles.
- Medicare Part B: government pays 80%, beneficiary pays 20% co-insurance + deductibles + premiums.
- Medicare Part C: government pays flat rate to private plan, beneficiary pays co-pays, co-insurance + premiums.
- Medicare Part D: beneficiary shares costs with drug plan until the catastrophic spending level is reached, then government pays.
- There are also 3 Medicare Cost Sharing programs that involve state Medicaid cost-sharing:
- Qualified Medicare Beneficiaries Program (QMB): pays the economically disadvantaged beneficiary’s Part B premiums and deductibles.
- Specified Low-Income Medicare Beneficiaries (SLMB): pays the Part B Medicare premium for qualified beneficiaries.
- Qualifying Individuals Program (QI): pays the Part B Medicare premium for qualified beneficiaries.
Your Cost-Sharing Depends on Your Personal Situation
Medicare is a cafeteria type system, not one size fits all. The “Parts” you choose and your income all factor in to the equation.
Part A Cost Sharing
Medicare Hospital Insurance (Part A) covers hospital care. It is free for anyone who has paid Social Security and Medicare payroll taxes for 10 years (40 quarters of work) and for the spouse of a person who has paid the taxes. Free is a bit of a misnomer. There’s no additional cost, because you already paid for the benefit through payroll taxes.
If you, or your spouse if you didn’t work, have 30-39 quarters of Medicare-covered employment, you’ll be required to pay a monthly premium ($227 in 2017) that includes some cost-sharing with the government. For those people who are not eligible for Part A and have fewer than 30 quarters worked, you’ll pay the full Medicare Part A premium ($413 in 2017).
There are various co-payments and deductibles that go along with Part A coverage. The first day in the hospital will cost a beneficiary $1,316 in 2017. The next 59 days are free. There is a co-payment of $329 per day for days 61-90. For days 91-150, the co-payment is $658 per day.
After a hospital stay of three days or more, some patients may be transferred to a skilled nursing facility for rehabilitation. The first 20 days are free. For days 21-100, the co-payment is $164.50 per day (2017 rates).
Part B Cost Sharing
Medicare Medical Insurance (Part B) covers doctor bills. There’s a monthly premium of $134 per month (2017 rate) for the majority of the 47 million beneficiaries, individuals with income up to $85,000 per year, and married couples with incomes up to $170,000.
The premium is higher for individuals with incomes above $85,000 per year and for married couples with incomes above $170,000 per year ($187.50 to $428.60 in 2017, depending on income). The premiums adjust each year.
- Is Medicare Free for Seniors and the Disabled?
- How Is Beneficiary Income Calculated by Medicare?
- How Can Beneficiaries Appeal Medicare Income Decisions?
- How Much are Medicare Premiums?