(Original Medicare – Hospital Insurance)4
Premiums for Medicare Part A, which pays for hospital care, are free for most people who’ve worked (and their spouses). It typically covers in-patient care at a hospital, as well as short skilled nursing facility and/or hospice stays. Part A also usually covers services like lab tests, surgery, doctor visits, and home health care related to hospital stay. (Not all stays are covered; it is important to check beforehand.) For people who are frequently admitted to the hospital, the out-of-pocket costs can quickly skyrocket.
Part A has a $1,556 deductible for each “benefit period,” or health care incident requiring hospitalization in 2022 ($1,600 in 2023). It’s important to remember that Part A is designed for inpatient care up to 60 days, and in addition to your deductible, longer stays carry high coinsurance charges with no annual or lifetime maximums
Here are the coinsurance charges you can expect to pay for longer hospital stays in 2022:
- Days 1-60: $0 coinsurance for each benefit period
- Days 61-90: $389 coinsurance per day of each benefit period ($400 in 2023)
- Days 91 and beyond: $778 coinsurance per each “lifetime reserve day” (you have a total of 60 “lifetime reserve days”
that can be used toward the same or different hospital stays.) ($800 in 2023). - Beyond lifetime reserve days: You pay all costs.
(Original Medicare – Medical Insurance)4
Medicare Part B is medical insurance, covering services and supplies that are medically necessary to treat a health condition. This can include outpatient care, lab work, preventative services, ambulance services, and durable medical equipment.
For 2022, retirees pay the standard premium of $170.10 each month ($164.90 in 2023). People in higher income brackets pay more.
The yearly deductible for Part B is $233 in 2022, and $226 in 2023. After your deductible is met, you typically pay 20% coinsurance for Medicare-approved amounts for most services from approved providers, with no yearly maximum on what you may have to pay out.
(Medicare Advantage)
Medicare Part C, or Medicare Advantage, is not a separate benefit, it’s the name used for private health insurers providing Medicare benefits. The companies
providing these policies are paid by Medicare for approved expenses.
Medicare Advantage plans replace Part A and Part B, and can replace optional Part D (drug) coverages. Federal law mandates that Part C cover all of the services provided by original Medicare Parts A and B except hospice care, which is always
provided by Medicare. Part C providers are also required to cover emergencies and urgent care within the U.S. (but not outside of the country).
Medicare Advantage plans still require premiums for Parts A and B be paid however, Part C can provide extra benefits, such as dental care, eyeglasses, or
wellness programs, and Medicare prescription drug coverage (part D).
Plan benefits and premium costs can change from year to year. There are many types of plans to choose from, and coverages, plan requirements, provider networks, and costs vary by carrier.
(Medicare Supplemental Insurance)6,7
Medigap plans are NOT Part C plans. They are not compatible, and if you have a Part C plan, it is illegal for anyone to sell you a Medigap policy. Medigap policies do not replace Original Medicare Plans A or B. In fact, you are required to have Parts A and B in order to purchase a Medigap policy. Medigap policies are supplemental and only cover one spouse – each person has to buy their own policy.
In general, a Medigap policy is private insurance that helps supplement or pay for some of the costs not covered by Medicare Part A and B, including copayments, coinsurance, and deductibles. Unless the policy is a “Medicare SELECT” policy, a Medigap policy can be used in any U.S. state or territory. Medigap policies issued after January 1, 2006, do not offer prescription drug coverage. You must buy a standalone Part D plan if you want that coverage as well as a Medigap plan.
Some Medigap policies also offer coverage for services that Original Medicare (Parts A and B) doesn’t cover, like medical care outside the U.S.
If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare approved amount for covered health care costs, then
your Medigap policy pays its share. Medigap policies generally don’t cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.
Insurance companies must sell standardized policies identified by most states by letters A through N (the letters A-C adding to immense consumer confusion).
They must all provide the same basic benefits, but some policies offer additional benefits and costs vary widely.
Medigap policies are guaranteed renewable as long as you pay the premium. However, premiums can go up. You may drop a Medigap policy, but you may not be able to get it back.
