Medicare insurance has cost-sharing that you’ll want to be familiar with. There are some out-of-pocket costs that will be yours to handle. Other than plan premiums, cost-sharing may include deductibles, copays, and coinsurance. Whether you’re turning 65 or already enrolled in a plan, The Fussell Group
is here to answer your Medicare questions.
What Exactly Is Medicare Cost Sharing?
Cost-sharing is the amount or portion of the whole cost that you pay for medical care and prescriptions.
The Difference Between Copays and Coinsurance
Copayment or copays and coinsurance are two terms you may know.
A copay is a dollar amount you pay — as your out-of-pocket portion. You’ve paid copays for medical services or prescription meds. For example, you pay $45 for every visit to your primary care doctor or $10 for a Tier 1 generic drug. Some prescription drug plans (PDPs) include different tiers for different drugs.
Meanwhile, coinsurance is a percentage of the total cost, but it works similarly to a copay. For example, you might pay 25% of the retail price for a Tier 3 brand-name drug. If the retail price is $200, you’ll pay $50 coinsurance.
Note: The retail prices of your formulary meds change throughout the year. This means your Medicare cost-sharing (or coinsurance) may also change.
Does Original Medicare Come with Copays?
No, but Medicare Part B includes coinsurance — meaning each time you see the doctor, you’ll pay 20% of the cost for the services provided.
However, if you add a supplement plan to your Original Medicare, it will help with the additional 20%.
Do You Need to Pay a Deductible with Medicare?
Yes.
A deductible is an amount of money you have to pay before the plan begins to pay.
You’ll pay a Part A deductible for every benefit period and a Part D deductible which changes every year.
Is There a Maximum Out-of-Pocket for Medicare?
No, not for Original Medicare. But there’s one on Medicare Advantage programs.
What Do You Pay Out-of-Pocket for Medicare Advantage?
When you join a Part C (Advantage) plan, the company sets the cost-sharing amount.
But it’s virtually impossible to predict your future medical costs with an Advantage plan.
The deductible, coinsurance, and copays you’ll pay depend on the program. These costs are your responsibility until you hit the plan’s yearly out-of-pocket limit. One thing you can know for sure is that you won’t top this maximum limit.
Related Post: What Is MA-PD?
What Are the Medigap Cost-Sharing Plans?
Three Medicare Supplement plans — K, L, and M — involve cost-sharing which helps keep the plan premiums lower.
Where Can You Get Your Medicare Plan’s Cost-Sharing Info?
Your plan will tell you what you’ll pay. You can find the info in the plan’s Summary of Benefits document OR the Annual Notice of Change letter — that you’ll get each year from your existing policy. You can also get more info on the plan’s website or talk to your Medicare insurance agent about cost-sharing.
Related Post: 3 Things to Expect When Working with a Medicare Agent
Need Help with Medicare Cost-Sharing?
To keep your out-of-pocket costs low consider a Medigap policy. All of them cover the 20% coinsurance for Original Medicare.
Call 1-877-874-0711 to talk to an insurance advisor. We’ll give you all the info you need to make an informed decision for your needs and budget.