Medicare is a United States federal health insurance program for Americans aged 65 and up who want to remain eligible for Social Security benefits. Though Medicare is often just a supplement to other forms of health insurance, it can provide coverage for hospital care, health-related supplies and equipment, home health care, hospice services, and skilled nursing facility care.
However, the Medicare program offers different parts with different benefits: Part A guarantees hospital insurance coverage to everyone eligible for Social Security or railroad retirement. Part B covers supplementary medical insurance (which covers 50% of the total cost). But before you sign up for this voluntary program and commit yourself to monthly premiums, here are the costs of Parts A and B.
Part A
The monthly premium for the original Medicare Part A (hospital insurance) was $232.80 in 2017 (up from $211 in 2014). According to the Social Security website, premiums are deducted from beneficiaries’ monthly Social Security checks. In addition, the beneficiary must pay a deductible amount of his or her choice ($1,288 in 2017), but this amount cannot exceed $413 a year. This is on top of monthly premiums.
However, people who have End-Stage Renal Disease (ESRD), also known as kidney failure, may not have to meet the deductible because their treatment for chronic conditions is more costly than other patients, and Medicare covers 100 percent of their costs through Part A.
The government reimburses hospitals for the full amount of hospital expenses incurred by Medicare Part A recipients. The government also covers 100% of what is spent on intravenous drugs, such as insulin and certain types of chemotherapy drugs. This will also include medications used to treat and prevent HIV-AIDS, such as HIV protease inhibitors.
It is important to remember that the government only covers medically necessary expenses. That means that any drug with an unapproved use would not be covered. When Medicare coverage doesn’t extend to a drug, all beneficiaries are responsible for co-payments. In some cases, beneficiaries are also responsible for paying the difference between a drug’s cash price and the benefit paid by Medicare.
Part A costs vary depending on the beneficiary’s age and the type of hospital or hospital setting where Medicare Part A benefits are used. Beneficiaries receive a set amount of money for all types of inpatient hospital services. The $5675 per year covers all Part A inpatient stays, regardless of the length or type of stay, regardless if the beneficiary has private insurance to cover a portion of their bills.
Monthly premiums are paid on a monthly basis and will be deducted from the Social Security check. If most beneficiaries use Medicare Part A, they can choose to pay more money than their monthly premium by paying an additional amount each time they visit a doctor or other health care provider. This additional amount is known as a co-payment.
If a person has Medicare Part B, they are not required to have Part A. They may add Part A at any time during the first six months of their Medicare eligibility, even if they do not want to participate in Part B. However, once a person joins Part B, there’s no way for them to remove it and keep only Part A.
Part A does not cover all medical costs incurred by beneficiaries and usually requires that beneficiaries pay monthly premiums. This can be costly for some and open up gaps in health insurance plans that may leave beneficiaries vulnerable financially.
Part B
Although Part B is optional, it is still mandatory for people who have Part A. It covers 50% of the cost of Medicare-approved services, including doctor’s fees, hospital bills, and medical supplies. The premium was $104.90 a month in 2017. The beneficiary pays no deductibles or coinsurance percentages to get reimbursed for hospital care or medical expenses (there is an exception to this rule; beneficiaries are obligated to pay 20 percent of their treatment costs exceeding an initial $183 a day). They also do not have to pay any coinsurance amounts, as most other insurance plans ask beneficiaries to pay these percentages before they would receive reimbursement from Medicare. The only way a beneficiary may be responsible for paying the difference between his or her medical expenses and the benefit paid by Medicare would be if he or she were to choose to use Medicare’s Part A and then need to see another health care provider.
The government will reimburse medical expenses, and beneficiaries cannot be billed for these expenses. Having said that, it is important to note that beneficiaries are responsible for paying any coinsurance amounts they may be required to pay due to their medical conditions or the benefits covered by Medicare. In some cases, beneficiaries are also responsible for paying the difference between drug prices and what Medicare will pay.
The amount of money Medicare Part B reimburses varies depending on each patient’s condition (infectious diseases or weight-related diseases are not covered) and the type of service being performed at a hospital, doctor’s office, or another health provider in question. It may also vary depending on the facility.
Beneficiaries receive a set amount of money for all types of medical services. This amounts to $8,753 per year and covers 75 percent of out-of-pocket expenses. The beneficiary must pay the remaining 25 percent.
The beneficiary needs to cover his or her costs by paying coinsurance percentages or higher co-payments for any specialty hospital outpatient services or private room and nursing service charges.
