Annual Costs of Medicare A
This type of Medicare covers your hospital bills.
In any given year you could pay nothing for Medicare A if you are never hospitalized. If you are hospitalized then you have to pay a deductible and a copay (coinsurance).
You monthly out-of-pocket costs: For most people this amount is zero. You most likely won’t have to pay this monthly fee out of pocket.
You won’t have to pay out-of-pocket if you worked for 10 years, and made at least $5,200 per year and are a U.S. Citizen.
If you worked only 7.5-9.5 years then you will pay about $232/mo.
If you worked fewer than 7.5 years you will pay $422/mo.
Deductible: What you pay when you have to go to the hospital before insurance kicks in.
This deductible is not like a normal deductible. It can happen multiple times in a year if you are hospitalized multiple times.
With Medicare A, you have a $1,340 deductible for each “benefit period” . What is a benefit period, you may ask? If you go to the hospital, are discharged and remain unhospitalized for 60 days, a new benefit period starts. For example, if you are hospitalized in January, released mid-January, and then hospitalized in August you would pay the deductible AGAIN. In the same year.
Coinsurance: What you pay out of pocket AFTER you pay the deductible.
Days 1-60: $0 coinsurance for each benefit period (remember the benefit periods are not annual.)
Days 61-90: $335 coinsurance per day during a benefit period.
Days 91 and beyond: $670 coinsurance per “lifetime reserve” day.
You only get 60 of these “lifetime reserve days.”
Even we are confused. So what does this mean?
Let’s say you are hospitalized for 120 days. You would pay nothing for days 1-60. Day 61-90 you would pay $335 x 30 days or about 10k. For days 91-120 you would pay another $670 x 30 or 20k. AND you will have used up 30 of your “lifetime reserve days.”
If the next year you were AGAIN hospitalized for 120 days you would have no more Lifetime reserve days because you only get 60.
If the following year you were hospitalized yet AGAIN for 120 days, the last 30 of those days you would pay full pop for the hospital. Yikes.
Beyond lifetime reserve days: pay all costs out-of-pocket.