(hospital and skilled nursing facility)
If you stay in the hospital for more than 60 days in any one benefit period, you’re charged a daily co-pay for each day from the 61st to the 90th. In 2020, the co-pay is $352 a day, but this amount increases a little each year. If you still need to remain in the hospital after 90 days, you can choose to draw on some of your lifetime reserve days. These days require a hefty co-pay — $704 a day in 2020 — and they’re limited to 60 days for the rest of your life. After these reserve days are exhausted, you must pay full costs.
If you’re admitted to a skilled nursing facility (SNF) after being in the hospital for the required three days, Medicare picks up the whole SNF tab for the first 20 days, and you pay nothing. After that, you pay a daily co-pay ($176 in 2020) for the next 80 days. If you need to be in the facility longer than 100 days in any one benefit period, you’re responsible for the full cost.
Co-payments (home health care and hospice care)
If you qualify for home health services (see Chapter 2), Medicare pays a home health agency for your care; you pay nothing. If you need or want a service that isn’t covered under the agency contract, you have to pay for it yourself — either in full or as a regular 20 percent Part B co-pay (see the later section “Part B costs”).
If you receive hospice services from a Medicare-approved agency (see Chapter 2), you pay almost nothing for this care. Two exceptions exist:
If you need prescription drugs to control the symptoms, such as pain, of your terminal illness, you pay up to $5 per prescription.
If you need to enter a nursing home for a short time so that your caregiver can catch a break, you’re expected to contribute 5 percent of the cost.
Out-of-pocket limits
Medicare places no annual upper limit on your expenses in Part A. But if you have a Medigap policy (which I describe in Chapter 4) or other supplemental insurance, it may cover Part A’s hospital deductible and co-pays.
Part B costs
Part B covers doctors’ services (in their offices, in hospitals or other facilities, or at your home), outpatient care such as lab tests and screenings, and some medical equipment and supplies. Note: The Part B costs described in the following sections apply if you’re enrolled in the traditional Medicare program. If you’re in a Medicare Advantage plan, see the later section “Medicare Advantage costs.”
Premiums
All people enrolled in Part B must pay a monthly premium to receive services (unless they’re eligible for state assistance, as explained in Chapter 4). In late fall, the federal government announces the Part B premium amount for the following year. In 2020, the standard premium is $144.60 a month. Note that qualifying word: standard. If your income is over a certain level, you pay more. Also, if there is no Social Security cost-of-living adjustment (COLA) in any given year, or only a very small one, you may pay different premiums from some other people. I explain the higher-income surcharge, and the impact of zero or small COLAs in some years, later in this chapter.
Deductible and co-payments
In 2020, the annual Part B deductible was $198. The amount usually goes up a little each year and is announced at the same time as the Part B premium. Typically, Medicare pays 80 percent and you pay 20 percent of the Medicare-approved cost of Part B services. Note that you may be charged more than 20 percent if you go to a provider who doesn’t accept the Medicare-approved cost as full payment, as I explain in Chapter 13.
Out-of-pocket limits
In traditional Medicare, Part B has no upper limit on out-of-pocket expenses. But if you have Medigap supplemental insurance (described in Chapter 4), it covers your Part B co-pays in full or in part, depending on the policy you buy.
Part D costs
Part D covers outpatient prescription drugs — the kind that are prescribed by a doctor and used by you at home. You can receive this coverage by enrolling in a stand-alone Part D drug plan (if you have traditional Medicare for your medical benefits) or in a Medicare Advantage plan that combines medical and Part D drug coverage in its benefit package.
Premiums
All stand-alone Part D plans charge monthly premiums. The amounts vary among plans, ranging from $12.20 to a high of $76.40 a month in 2020, with most charging around $32 a month. Most Medicare Advantage plans combine both health and drug services under one premium, but some charge no premiums at all. Both types of plans can change their premiums every calendar year.
Deductible
You can’t be charged more than a certain amount in any one year for the annual Part D deductible, whether you’re enrolled in a stand-alone plan or a Medicare Advantage plan. In 2020, the maximum deductible was $435 ($415 in 2019). But many plans charge lower amounts or, in some cases, nothing at all.
Co-payments
Two factors determine your Part D co-pays:
The amount your plan charges for each specific drug you take: Flat dollar co-pays stay the same all year, but those that are percentages of the cost of the drug can fluctuate throughout the year as the full price goes up or down. (I explain how plans determine co-pays in Chapter 14.)
Which phase of coverage applies to you in Part D’s annual cycle: Are you in the deductible, initial coverage, doughnut hole, or catastrophic coverage phase when you fill prescriptions at different times of the year? (I explain the four phases of Part D coverage in Chapter 2.)
