Medicare Part A, Benefit Periods and Deductibles

Published by: Medicare Made Clear

You may be familiar with insurance deductibles. Many homeowners and car insurance policies charge a deductible whenever you file a claim.

 

A health insurance deductible is usually charged once for the plan year. Starting January 1 or whenever your plan year begins, you pay your health care costs up to the deductible amount. After that, your health plan kicks in to help pay the cost of your care for the rest of the plan year. The cycle starts over at the beginning of each new plan year.

 

Medicare Part A deductibles are different. They are charged for each benefit period rather than for the year.

 

 

What Is A Benefit Period?

 

In Medicare Part A, which is hospital insurance, a benefit period begins the day you go into a hospital or skilled nursing facility and ends when you have been out for 60 days in a row. If you go back into the hospital after 60 days, then a new benefit period starts, and the deductible happens again. You would be responsible for paying two deductibles in this case – one for each benefit period – even if you’re in the hospital both times for the same health problem.

 

Here's an example of how your hospital care may use two benefit periods.

 

Margaret is admitted to the hospital in January and stays 5 days. She is readmitted in April and stays for 65 days. More than 60 days pass between Margaret being released and readmitted. Margaret’s second hospitalization starts a new benefit period, and she must pay another deductible. She is in the hospital over 60 days this time, so she must also pay a co-pay for 5 days. For 2020, the Part A deductible is $1,408 and the daily copay is $352.

Item Amount

First Stay

Medicare Part A deductible

$1,408

Copay days 1-5

$0

Second Stay

Medicare Part A deductible

$1,408

Copay days 6-8

$0

Copay days 61 to 65

(5 days at $352 each)

$1,760

Total Margaret Pays:

$4,576

[Note: Margaret is not a real person. Dollar amount is not actual and is for illustration only.]

 

However, one benefit period could span more than one hospitalization. Imagine you’re in the hospital for a short stay and then you’re released. A few days later you have a set-back and go back into the hospital. Your benefit period is still in effect. In this case, you would be charged just one deductible.

 

Here's an example of how a single benefit period could span more than one hospitalization.

 

Roger is admitted to the hospital in December and stays 5 days. He is readmitted in early February and stays for 3 days. He was out of the hospital less than 60 days before he went back. Roger is in the hospital for a total of 8 days, all within a single benefit period. He pays just one deductible, and that covers all the hospital charges. The Part A deductible is $1,408 in 2020.

Item Amount

First Stay

Medicare Part A deductible

$1,408

Copay days 1-5

$0

Second Stay

Medicare Part A deductible

$0

Copay days 6-8

$0

Total Roger Pays

$1,408

[Note: Roger is not a real person. Dollar amount is not actual and is for illustration only.]

 

 

Part A Lifetime Reserve Days

 

Medicare Part A covers an unlimited number of benefit periods, and it helps pay for up to 90 days of care for each one. After 90 days, it’s possible to tap into lifetime reserve days.

 

Lifetime reserve days are like a bank account of extra hospital days covered by Medicare. You have 60 extra covered days in your account that you can use over your entire life. Lifetime reserve days may be applied to more than one benefit period, but each day may be used only once.

 

 

Hospital Costs with Medicare Advantage May Be Different

 

Medicare Advantage plans (Part C) are an alternative to Original Medicare (Parts A & B). They are offered by private insurance companies approved by Medicare.

 

Medicare Advantage plans set their own cost-sharing terms and may or may not charge deductibles for hospital stays. Some plans may charge a flat amount per hospitalization up to a set number of days. Other plans may charge a copay or coinsurance amount for each day in the hospital.

 

Medicare Advantage plans include hospital and medical insurance all in one plan. Costs, coverage and other details are explained in plan materials. You can get specific plan information by calling the insurance company offering the plan or by visiting the company’s website.

 

 

Key Points to Remember About Medicare Part A Costs:

 

  • With Original Medicare, you pay a Medicare Part A deductible for each benefit period.
  • A benefit period begins when you enter the hospital and ends when you are out for 60 days in a row.
  • One benefit period may include more than one hospitalization.
  • Medicare Advantage plans may or may not charge deductibles for hospital stays.

Understand Medicare Cost Basics

 

Learn more about Medicare premiums, copayments, coinsurance, out-of-pocket limits and more.

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Medicare Made Clear

 

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