Even though you may be enrolled in Medicare Part A, which covers hospital visits, those visits will not be free. Most people don’t pay a monthly premium for Part A. If you worked for 10 years, you already paid for it. If you have to buy Part A, you’ll pay up to $407 each month (2015 costs). Medicare has a premium calculator to make it easy.
Original Medicare will pays about 80% of your inpatient costs, and you pay the rest. The amount will vary depending on the length of your stay and the seriousness of your illness or condition. To understand this you might have to learn some new terms.
Here is how your expenditure is calculated (the specific amounts are for 2015):
The first term you need to know is deductible. This is the amount you have to pay before Medicare begins to pay its share. A benefit period begins the day you go into the hospital and ends when you have stayed out of the hospital for 60 days. For each benefit period you pay:
- $1,260 deductible for each benefit period
- Days 1-60: $0 coinsurance for each benefit period
- Days 61-90: $315 coinsurance per day of each benefit period
- Days 91 and beyond: $630 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
- Beyond lifetime reserve days: all costs
A coinsurance is a fixed amount of money you pay for a service; anything above that amount Medicare pays. It’s not hard to see how your bills can really add up fast.
If you need to stay in a skilled nursing facility after you’ve been hospitalized, there is also a coinsurance but it is different:
- Days 1–20: $0 for each benefit period.
- Days 21–100: $157.50 coinsurance per day of each benefit period.
- Days 101 and beyond: all costs.
If you need mental health services as an inpatient, that has it’s own schedule, as well:
- $1,260 deductible for each benefit period.
- Days 1–60: $0 coinsurance per day of each benefit period.
- Days 61–90: $315 coinsurance per day of each benefit period.
- Days 91 and beyond: $630 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime).
- Beyond lifetime reserve days: all costs.
- 20% of the Medicare-approved amount for mental health services you get from doctors and other providers while you’re a hospital inpatient.
About the only time you won’t need to worry too much about your costs is when you decide it’s time for hospice care:
- $0 for hospice care.
- You may need to pay a copayment of no more than $5 for each prescription drug and other similar products for pain relief and symptom control while you’re at home. In the rare case your drug isn’t covered by the hospice benefit, your hospice provider should contact your Medicare drug plan to see if it’s covered under Part D.
- You may need to pay 5% of the Medicare-approved amount for inpatient respite care.
- Medicare doesn’t cover room and board when you get hospice care in your home or another facility where you live (like a nursing home).
It’s important that you consider these costs when deciding whether Original Medicare is enough for you, or you need Medicare Advantage or a Medicare Supplement. All the information you want can be found in our catalogs.