Medicare benefits cover many things, from hospitalization to doctor’s visits to certain types of medical equipment, but you’ll still be responsible for sharing some of your health care costs. Out-of-pocket expenses is the term for your share of your medical expenses as a Medicare subscriber.
Your Medicare out-of-pocket expenses will depend on what type of Medicare plan you have. Here’s a quick look at the expenses associated with different types of plans.
Medicare Part A pays for hospitalization, as well as short stays in skilled nursing communities for rehabilitative care. Medicare Part A typically pays for a set amount of covered services per day, depending on the length of your stay. If the costs exceed the maximum amount, you must pay for the rest out of pocket.
For example, as of June 2024, Medicare Part A pays 100% of the costs for the first 60 days of hospitalization and then up to $408 per day for days 61 to 90. If the actual cost of hospitalization was $420 per day for days 61 to 90, you would pay $12 per day out of pocket.
Medicare Part B covers outpatient services, such as doctor’s visits and diagnostic testing, and durable medical equipment. Generally, Medicare Part B pays 80% of covered expenses. The remaining 20% becomes an out-of-pocket expense. For example, if your doctor charged you $100 for an office visit, Medicare would pay $80 and you would be responsible for a $20 coinsurance payment.
An alternative to Original Medicare, Medicare Part C or Medicare Advantage is coverage you obtain through a private insurance company. Under Medicare rules, Advantage plans must cover everything Medicare Parts A and B do. Many plans also provide additional benefits, such as dental coverage or prescription drug coverage.
Most Medicare Part C plans come with out-of-pocket expenses. Depending on the plan, you may be responsible for paying a flat co-pay for specific services, such as $25 for every doctor’s visit. Other plans may have coinsurance, requiring you to pay a certain percentage of all expenses.
Medicare Part D is an optional prescription drug plan you can combine with Original Medicare or Medicare Part C. You obtain the coverage through a private insurer, and out-of-pocket expenses vary based on your plan. However, most Medicare Part D policies will require you to pay co-payments or coinsurance.
Medicare premiums are an amount you pay monthly to have a Medicare policy. The amount of the premium depends on the type of plan. As of June 2024, here are the premiums:
Medicare deductibles are an amount you must pay before your Medicare plan will cover medical expenses. Like premium rates, deductibles vary based on your Medicare plan. As of June 2024, deducible costs are:
If you’re concerned about paying Medicare out-of-pocket costs, there are options available to help.
Also called Medigap, Medicare supplement insurance is an insurance policy that helps to pay for out-of-pocket expenses. With most plans, you pay a monthly premium and the plan will cover a certain percentage of costs under your Original Medicare or Medicare Advantage plan.
Low-income Arizona seniors may qualify for the state’s Medicaid program. Medicaid can help reduce your out-of-pocket expenses, and you typically don’t have to pay a monthly premium for coverage.
If you have unpaid medical bills and permanent life insurance, contact your insurance company to see if your policy has any cash value. You may be able to borrow against your policy, access the cash value or sell your policy to help cover your out-of-pocket medical expenses.
For help with prescription drug costs, consider signing up for the Arizona RX Card. You can use this card at more than 68,000 pharmacies in Arizona to get discounts on medications.
