If you have Medicare, you want to know how much you will pay in out-of-pocket costs. Medicare charges premiums, coinsurance, copayments, and deductibles. Learn more about the Medicare deductible for 2021 along with the other costs you can expect.
You will have to pay a deductible for the Original Medicare (Part A and Part B) as well a deductible for prescription drug coverage (Part D). The deductible refers to the amount that you will have to pay out of your own pocket before your coverage kicks in. Once you meet your deductible, you will only be responsible for copays and coinsurance. However, some services are covered without the deductible being met. This can be confusing, so take a look at how it works.
Assume you have a $185 deductible, but your plan also covers all costs associated with preventative care. You go to the doctor and get a checkup and do not have to pay anything for the visit. When you leave the office, you still have a $185 deductible.
Now, let’s say you have an accident and injure yourself. You have to go to the doctor for an examination and get a medical device to assist in your recovery. This is not a preventive service, so you will have to pay your deductible. The bill comes to $300. You will pay your deductible, and then the coverage will kick in. You will just pay your coinsurance for the rest.
Medicare deductible can increase each year. For 2019, the Part A deductible was $1,364 for each benefit period. The Part B deductible was only $185 for the benefit year. After meeting the Part B deductible, your plan would likely cover 80 percent of the costs.
Medicare Part D is offered through private health insurance companies. Most plans included a deductible of $415 in 2019.
The Medicare deductible for 2021 might increase slightly. The Part B deductible was $2 higher in 2019 than it was in 2018. The Medicare Part A deductible for inpatient care increased $24 from 2018 to 2019.
Medicare Part A is hospital insurance. The Part A deductible is charged per benefit period, and the period begins when you enter a skilled nursing facility or hospital. The period ends 60 days after you stop receiving inpatient care. Then, if you go back to the hospital or into a skilled nursing facility, a new benefit period will begin. You can enter multiple benefit periods in a single year. Also, if you stay in the hospital or a skilled nursing facility for an entire year, a single benefit period will last the whole year.
You will have to pay your deductible during the benefit period, along with other costs. You will not have to pay coinsurance for the first 60 days of inpatient care. On days 61-90, your coinsurance will be $329 a day. For the next 60 days, you will be charged $658 per day. This is referred to as “lifetime reserve days,” and you only get to use them once. After your lifetime reserve days are up, you will be responsible for 100 percent of your hospital costs starting on day 91.
Most people do not have to pay a premium for Medicare Part A. You pay Medicare taxes, and those taxes allow you to have this coverage without a monthly premium.
Medicare Part B is your medical insurance. It covers preventative care and medically necessary services. Medically necessary services refer to diagnostic testing and treatments. Preventative care refers to checkups and other services that keep you healthy all year long. You do not have to pay a deductible to use these services.
You will have to meet the deductible for other medical services, such as outpatient therapy and medical equipment. Once you meet the deductible, your coinsurance will be 20 percent.
You will also have to pay a premium for Medicare Part B. In 2019, the standard Medicare Part B premium was $135.50 a month. The standard premium is only available to individuals who make $85,000 or less a year or couples who make $170,000 or less a year. If you make more, Medicare will add an income-related monthly adjustment amount to your premium. The highest premium was $460.50 a month in 2019. Individuals who made at least $500,000 and couples who made at least $750,000 a year had to pay this amount.
Original Medicare only covers certain medications that you receive while an inpatient at a hospital or skilled nursing facility or medications you cannot administer yourself, such as injections. If you want prescription coverage, you will need to get Medicare Part D.
You will be required to pay the deductible before the full coverage kicks in. Until you meet the deductible, you will be charged the network discount price for all of your medications. Then, you will pay a copay until you reach the coverage gap.
In 2019, the coverage gap was reached when the beneficiary and Medicare Part D paid a combined total of $3,820. People have to pay more for prescription drugs when they reach the coverage gap, but the amount cannot be higher than 25 percent of the cost. After spending $5,100 out of their own pockets, people leave the coverage gap. Then Medicare Part D pays 95 percent of the drug cost. That leaves beneficiaries with the remaining 5 percent of the cost.
You have the option of getting the Original Medicare or Medicare Advantage. A licensed insurance agent can help you make a selection. Your agent will go over the coverage options and out-of-pocket costs and help you select a plan that makes the most sense for your financial and health needs. Speak to an agent today to begin the process of finding insurance. With an agent’s help, you can easily find the right coverage.