Medicare is the primary hospital and medical insurance coverage for tens of millions of Americans aged 65 or older or under 65 who qualify due to disabilities. Many Medicare beneficiaries live on fixed incomes from pensions or social security. Any cost above what appears in their normal budget poses a risk to their financial security. Given those circumstances, it is reasonable for Medicare recipients to want to know about what, if any, kind of deductibles apply to their Medicare coverage.
Medicare Part A Deductibles
Medicare Part A (Hospital Insurance) helps cover inpatient care in hospitals or skilled nursing facilities, in hospice, or home health care. For example, if you have an infected appendix and you are admitted to the hospital for a surgeon to perform an appendectomy, Part A will help cover the costs during your stay, including medically necessary services and supplies, general nursing care, semi-private rooms, and meals.
Medicare Part A does have a deductible for each benefit period. We’ll talk more about benefit periods in the next section. Your deductible for each period in 2019 is $1364. That means you’ll be charged up to that amount for any services provided during your inpatient stay at the hospital. The same deductible applies for each benefit period if you’re admitted as an inpatient at a skilled nursing facility for a period of time.
The Part A benefit period can sometimes seem confusing. The benefit period isn’t fixed to the calendar, but rather is based on when you start and stop treatment. Let’s say you haven’t had any inpatient treatment for the last year before getting admitted for your appendectomy. Your benefit period starts when you get admitted. When you get discharged, a countdown begins. If you go 60 days without receiving more inpatient care, you start a new benefit period. Your deductible goes back into effect for each benefit period. If you require additional inpatient care within 60 days, it extends the benefit period from your appendectomy. The countdown starts over again when you get discharged.
Medicare Part B Deductibles
Medicare Part B (Medical Insurance) covers a wide variety of medically necessary care, ranging from doctor or clinic visits to outpatient surgical procedures. Let’s say you go to a clinic because of acute stomach pain related to your appendix. Medicare Part B will probably handle the billing for that clinic visit because it’s typically an outpatient service.
Medicare Part B also employs a deductible. Unlike Part A, Part B has an annual deductible. In 2019, the annual Part B deductible is $185. That means you’re responsible for non-inpatient bills up to that amount. After you reach that deductible threshold, Medicare takes responsibility for 80% of non-inpatient costs. You cover the balance.