Medicare Copays, Coinsurance, Deductibles, Maximums, and More For Medicare Parts A, B, C, D, and Medigap
Please note that cost sharing amounts change each year. Below are the cost sharing amounts for the current year.
Quick Cost Sharing Definitions For Medicare
Below are some quick definitions related to cost sharing term used in Medicare.
- Premium: The amount you pay every month to keep your coverage.
- Out-of-Pocket Costs / Cost Sharing: The costs you incur beyond your premium including copays, coinsurance, deductible, and an out-of-pocket maximum.
- Copay: A dollar amount you pay when you access a service subject to a copay.
- Coinsurance: The % split between what you owe and what your insurer owes for a service.
- Deductible: The amount you must pay out-of-pocket before your health plan starts paying coinsurance.
- Out-of-Pocket Maximum or Limit (Also called Maximum Out-Of-Pocket or MOOP): The maximum dollar amount you can pay in out-of-pocket costs each calendar year before all in-network services are covered by your insurer.
- Standard Initial Coverage Limit and Coverage Gap Limit (Catastrophic Coverage Threshold): With Part D there are 4 phases based on dollar amounts in which costs are lowered after your deductible. In each phase the amount you pay for drugs is lowered. It works like this, first you meet your deductible, then you enter the initial coverage period, then the coverage gap period, and then finally the catastrophic coverage period.
NOTE: All numbers below apply to 2020 only. This page will be updated each year.
Medicare Part A (Hospital Insurance) Cost Sharing
Part A is part of Original Medicare. Part A has a deductible and coinsurance, but no copays, premiums, or an out-of-pocket maximum. One thing to note is that coinsurance costs differ depending on the length of a hospital stay and are unique for skilled nursing.
- Part A Premium: No Premium.
- Part A Deductible: $1,364 per benefit period.
- Part A Coinsurance: After you meet the deductible $0 for days 1-60, $341 for days 61-90, $682 for days 91-on (you get 60 Lifetime Reserve days); after you pay the full cost. Also, skilled nursing coinsurance is $170.
- Part A Out-of-Pocket Maximum: No out-of-pocket maximum.
Medicare Part B (Medical Insurance) Cost Sharing
Part B is also part of Original Medicare. Part B has a premium, which can be lowered based on income. Part B also has a deductible. Like Part A, Part B has no maximum.
- Part B Premium: $135.50 – $460.50 depending on income.
- Part B Deducible: $185.
- Part B Copay: Depends on the service (typically a service will only have a copay or coinsurance).
- Part B Coinsurance: After you meet the deductible, you pay 20% of each medical bill, and Medicare pays 80%,.
- Part B Out-of-Pocket Maximum: No out-of-pocket maximum.
NOTE: Part B can be subject to late enrollment penalties which can increase the premium.
Part C (Medicare Advantage) Cost Sharing
Part C is a part of Medicare provided by private insurers. There are many different Part C plans, many of which cover drugs, and most of which offer different cost sharing structures. In general though, all Part C plans offer at least the benefits of Part A and Part B (but often go beyond that, for example by covering more of the Part A and Part B cost sharing). Unlike Original Medicare, Medicare Advantage plans must have an out-of-pocket maximum.
- Part C Premium: When you enroll in Medicare Advantage, you continue to pay your Part B premium. Otherwise, Part C premiums vary by plan.
- Part C Deductible: Depends on the plan, but can’t be higher than the out-of-pocket maximum.
- Part C Copay: Depends on the plan.
- Part C Coinsurance: Depends on the plan.
- Part C Out-of-Pocket Maximum: Cannot be higher than $6,700 (drug maximum may be different than health plan maximum).
NOTE: Part C plans can include Part D drug plans, and thus drug plan cost sharing can apply to Part C plans.
Part D (Drug Plan) Cost Sharing
Part D plans are drug plans. They offer better cost sharing and coverage on drugs, but each offers unique drug lists subject to copays, coinsurance, deductibles, and a maximum. One important note is that Part D plans have four “phases” which essentially act like deductibles. They are the Deductible period, Initial Coverage period, Coverage Gap period, and Catastrophic Coverage Period.
- Part D Premium: Depends on the plan.
- Part D Deductible: Depends on the plan, but can’t be higher than the Initial Coverage Limit. Once the limit is reached, you enter an Initial Coverage period.
- Part D Standard Initial Coverage Limit: Depends on plan, but can’t be more than $3,820. After the limit is reached, you enter a Coverage Gap period. NOTE: Not every Part D plan has a Coverage Gap period.
- Part D Copay: Depends on the plan and on what tier a drug is.
- Part D Coinsurance: Depends on the plan.
- Part D Coverage Gap limit (Catastrophic Coverage Threshold): Once you hit $5,100, you exit the Coverage Gap period and enter a Catastrophic Coverage period. In this period medication costs are lowered to $3.40 per generic drug, and $8.50 or 5% (whichever is greater) per brand-name drug. This Catastrophic coverage period.
NOTE: Part D can be subject to late enrollment penalties which can increase the premium.
Medigap (Medicare Supplement) Cost Sharing
Medigap plans fill in the gaps in Part A and B, meaning they can offer additional benefits and cost sharing beyond Original Medicare for the Part A and Part B cost sharing. Medigap can’t however offer drug plans (instead you can pair Original Medicare, Part D, and Medigap). What Medigap covers in terms of cost sharing is standardized by letter plan, but premium costs can differ by region and factors like age.
- Medigap Premium: Depends on the letter plan, region, and factors like age.
- Medigap Deductible: Some Medigap plans lower the Part A and/or B deductible, others cover it completely.
- Medigap Copay: Some Medigap plans lower the Part A and/or B deductible, others cover it completely.
- Medigap Coinsurance: All Medigap plans cover 100% of the Part A coinsurance amount up to 365 days after Original Medicare. Medigap plans may also cover some or all of other Part A and B copays and coinsurance.
- Medigap Out-of-Pocket Maximum: Plans K and L offer out of pocket maximums of $5,560 and $2,780 respectively.
- 2019 Medicare Parts A & B Premiums and Deductibles. CMS.Gov.
- Catastrophic Coverage. Medicare.Gov.
- CMS Memo Discussing MOOP. CMS.Gov.