Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD). The different parts of Medicare help cover specific services.

Medicare Part A (Hospital Insurance) covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.

Medicare Part B (Medical Insurance) covers certain doctors’ services, outpatient care, medical supplies, and preventive services.

Understanding what Medicare Covers

When you are eligible and qualify for Medicare you should carefully consider the costs and responsibilities associated with your medical treatment.

Part A

  • Most people don’t pay a monthly premium for Part A.
  • Part A  deductible is $1,288 in 2016 for each benefit period.
  • Days 1–60: $0 coinsurance in 2016 for each benefit period.
  • Days 61–90: $322 coinsurance per day in 2016 of each benefit period.
  • Days 91 and beyond: $644 coinsurance in 2016 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 in 2016.

Part B

  • Most people pay $104.90 each month in 2016 for Medicare Part B.
  • Part B deductible is $166 per year in 2016.
  • Part B coinsurance is typically 20% of the Medicare-approved amount for most doctor services (including most doctor services while you’re a hospital inpatient), outpatient therapy, and durable medical equipment.
  • On Original Medicare your Maximum Out of Pocket expenses for your 20% of Part B expenses are UNLIMITED.

Things to Consider

Due to the unlimited Out of Pocket expenses of Original Medicare most people choose to fill the gaps with one the following:

  • Medicare Supplement (Medigap)
  • Medicare Advantage (Part C)
  • Both of these options will limit your Maximum Out of Pocket Expenses (MOOP)