Medicare Part A
The original Medicare program was designed to provide health benefits for America’s senior citizens and contained two parts, Medicare Part A and Medicare Part B. Medicare Part A was specifically designed to cover hospital expenses.
Medicare Part A coverage includes:
- Inpatient hospital procedures that include at least an overnight stay
- Semi-private rooms
- Required tests
- Doctor’s fees
Part A will also cover brief stays in a skilled nursing home for convalescence, provided that the following criteria are met:
- A hospital stay beforehand of at least three days and three nights, not including the discharge date.
- A stay in a nursing home must be the result of a problem diagnosed at the hospital or the cause of the hospital visit.
- A patient has another ailment that requires skilled nursing attention. Custodial, non-skilled, and long-term care facilities and programs are not covered.
Medicare Part A’s coverage of nursing homes is not all-inclusive; there are guidelines to the coverage that are important to understand to avoid costly charges. Part A will cover up to 100 days in a skilled nursing facility, but there are out-of-pocket costs for patients. 2015 coverage amounts are listed below:
- Day 1-20: Medicare covers 100%
- Day 21-100: You pay $157.50 coinsurance per day*. Medicare covers the rest.
- Beyond 100 days: You are responsible for all charges.
Medicare covers services (like lab tests, surgeries, and doctor visits) and supplies (like wheelchairs and walkers) considered medically necessary to treat a disease or condition.
If you’re in a Medicare Advantage Plan or other Medicare plan, you may have different rules, but your plan must give you at least the same coverage as Original Medicare. Some services may only be covered in certain settings or for patients with certain conditions.
In general, Part A covers:
- Hospital care
- Skilled nursing facility care
- Nursing home care (as long as custodial care isn’t the only care you need)
- Home health services
Medicare Part B
You pay a premium each month for Part B. If you get Social Security, Railroad Retirement Board, or Office of Personnel Management benefits, your Part B premium will be automatically deducted from your benefit payment. If you don’t get these benefit payments, you’ll get a bill.
Most people will pay the standard premium amount. However, if your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you may pay an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.
The standard Part B premium amount is $121.80 (or higher depending on your income). However, most people who get Social Security benefits will continue to pay the same Part B premium amount as they paid in 2015. This is because there wasn’t a cost-of-living increase for 2016 Social Security benefits. You’ll pay a different premium amount if:
- You enroll in Part B for the first time in 2016.
- You don’t get Social Security benefits.
- You’re directly billed for your Part B premiums.
- You have Medicare and Medicaid, and Medicaid pays your premiums. (Your state will pay the standard premium amount of $121.80.)
- Your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount.
If you’re in 1 of these 5 groups, here’s what you’ll pay:
|If your yearly income in 2014 (for what you pay in 2016) was||You pay each month (in 2016)|
|File individual tax return||File joint tax return||File married & separate tax return|
|$85,000 or less||$170,000 or less||$85,000 or less||$121.80|
|above $85,000 up to $107,000||above $170,000 up to $214,000||Not applicable||$170.50|
|above $107,000 up to $160,000||above $214,000 up to $320,000||Not applicable||$243.60|
|above $160,000 up to $214,000||above $320,000 up to $428,000||above $85,000 and up to $129,000||$316.70|
|above $214,000||above $428,000||above $129,000||$389.80|
Part B deductible & coinsurance
You pay $166 per year for your Part B deductible. After your deductible is met, you typically pay 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.
In 2016, there may be limits on physical therapy, occupational therapy, and speech language pathology services. If so, there may be exceptions to these limits.