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Even if on Medicare, there are some costs that you might have to pay from your own pocket – they are called copayments.
However, the amount you pay depends on a variety of factors, like the type of plan and current Medicare rates for the year. Your additional insurance can also influence the copay for specific services and drugs.
We understand all of this can be very confusing – especially if you are new to the Medicare system.
This is why we have created this quick and easy guide to understanding what Medicare copay is.
Let’s get started!
Does Medicare have copays?
Yes, Medicare does have copays. A copay (or copayment) refers to the fixed amount of money that you pay when visiting the doctor, getting a prescription drug, or using certain healthcare services.
This out-of-pocket cost is usually small and agreed upon beforehand. Most Medicare beneficiaries pay between $10 to $45 in their copays.
However, please note that Medicare has different parts and each part can have its own copay rules. So, if you don’t pay attention to the details of the plan, these copays can add up and cost you a lot.
What’s the difference between copayment and coinsurance?
When going through the different parts of Medicare, you would have noticed that Part A and Part B use the term coinsurance — whereas Part C and D use copayment. These words sound very similar, but they aren’t.
- Coinsurance is the percentage of the cost you pay after Medicare covers its share. It’s not definite and will vary according to the total bill.
- Copayment is the fixed amount you pay for a specific healthcare service. It’s predictable.
So, essentially, Medicare Part B doesn’t have a copay. You will only find copayments in Medicare Part A, C, and D.
However, since all Parts require you to pay some amount out of your pocket, we will break down the costs and coverage in 2024 below. Keep reading!
Medicare Part A copay
Medicare Part A is hospital insurance. It helps cover costs when you’re admitted to a hospital or skilled nursing facility or receive certain home health care services.
It’s often called “free” because many people don’t have to pay a monthly premium if they or their spouse paid Medicare taxes while working. The person must have worked at least 40 quarters to avail of this benefit.
But if you worked less than that, you will pay a $278 fee every month. People who worked less than 30 quarters will pay a full premium of $505.
Apart from this, the annual deductible for Medicare Part A is $1632 in 2024. This is the amount you must pay before insurance kicks in to cover your inpatient healthcare costs.
Please note that Part A fully covers the first 60 days of your inpatient hospital stay. Copayment starts at $408 per day after 60 days. This will increase to $816 after 90 days.
For patients in skilled nursing facilities, the copayment is $204 per day after you have completed at least 21 days.
Medicare Part B copay
Medicare Part B is medical insurance. It helps cover doctor visits, outpatient care, preventive services, and medical supplies. Your Part B will cover you for any healthcare service or check-up to get outside of the hospital.
The monthly premium for Part B is mandatory for all beneficiaries. In 2024, this is $174.70 and will be deducted directly from your social security check. However, if you have a high monthly income, the premium will increase accordingly.
The annual deductible is $240, which is a $14 increase from the amount charged in 2023. This is fixed and won’t vary with your monthly income. Once you have paid it, there will be no copay for Medicare Part B.
Instead, there will be a coinsurance of 20% on all Medicare-approved amounts for outpatient services and supplies.
Medicare Part D copay
Medicare Part D is prescription drug coverage that helps pay for medications recommended by your doctor. You choose a private insurance provider that works with Medicare to cover your drug costs.
However, since each Part D plan uses a different formulary, the copayments and coinsurance can vary greatly. Your monthly premium and deductibles will also depend on the chosen insurance provider.
On average, the monthly premium for Part D is between $32 to $43. This amount is typically adjusted based on your income. So, high-income individuals will pay much more than low-income ones.
As for the annual deductible, Medicare restricts it to no more than $545 in 2024. Most insurance providers will offer you lower limits and even a $0 deductible – in exchange for slightly higher premiums.
Medicare also restricts coinsurance to 25% once you have spent a total of $5,030 on medicinal drugs and deductibles. But it’s still recommended to compare different formularies and Part D plans to get the lowest copays.
Medicare Advantage copays
Medicare Part C, also known as Medicare Advantage, is an all-in-one alternative to Original Medicare (Parts A and B). Private insurance companies offer Part C plans that often include hospital, medical, and prescription drug coverage.
Some plans may also offer extra benefits like dental or vision care. So, each plan has a different copay, premium, and deductible.
The average Part C premium is $27 in 2024. When combined with a deductible, this amount can reach up to $200+ annually.
Is there any copay assistance for Medicare patients?
The government understands that Medicare copay can be expensive for certain beneficiaries. So, yes, you will find several copay assistance programs like:
- Medigap
Medigap, also known as Medicare Supplement Insurance, helps cover some copayments, deductibles, and other out-of-pocket costs that Original Medicare (Parts A and B) doesn’t fully cover.
There are 10-types of Medigap policies available with different coverage levels and benefits. It’s best to go through each and select the most comprehensive one. But please note that you will have to pay a monthly premium for this additional coverage and it will only supplement Original Medicare, meaning if you have a Medicare Advantage plan you cannot have a Medigap plan.
- Medicare Savings Plan
Medicare savings plan is designed for low-income individuals. It has 4-programs that help cover monthly premiums and copays for Medicare. You may also get coverage for deductibles.
- Extra Help
The Extra Help insurance helps pay your Part D out-of-pocket costs. Most individuals with both Medicare Part D and Extra Help pay $0 for prescription drugs.
- Tricare for Life
If you are a retired military personnel or a family member, you should consider Tricare for Life benefits. It covers all your out-of-pocket expenses, though you must pay Part B premium to stay eligible.
Resources used:
https://www.medicare.gov/basics/costs/medicare-costs
https://www.cms.gov/medicare/eligibility-and-enrollment/origmedicarepartabeligenrol
https://www.ncoa.org/article/what-you-ll-pay-in-out-of-pocket-medicare-costs-in-2023
https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage
Article updated on January 12, 2024.
