April 17th 2024
By Ari Parker
How much Medicare pays for various services depends on a number of factors. Explore different scenarios in this post.
By Ari Parker
Deductibles, coinsurance, and copayments—oh, my! Insurance terminology can be incredibly complicated. It leaves many people confused about how much they owe for healthcare services. On top of standard insurance terms, Medicare has its fair share of industry lingo. With all of its different Parts and plans, Medicare leaves people confused about what’s actually covered and how much Medicare will pay.
Fear not! Once you understand Part A and Part B costs, it all starts to click. Plus, you can always get in touch with your insurance or a Medicare Advisor if you have questions about your specific plan.
How much Medicare pays depends on what service you need and where you receive care.
Medicare Part A pays for all hospital stay costs for the first 60 days after you reach your Part A deductible.
In general, Medicare Part B pays 80% of covered services once you’ve met your annual deductible.
A Medicare Supplement plan can help pay for the 20% of costs that Medicare Part B doesn’t cover as well as certain Part A costs.
Medicare Advantage plans vary in how much they cover for services. Check your policy’s summary of benefits for details about out-of-pocket costs.
Part A is your inpatient insurance. It pays for stays at a hospital or skilled nursing facility, home health care, and hospice care. Medicare Part A is premium-free if you’ve been working and paying taxes for at least 10 years. However, there are still some costs that you’ll have to pay per benefit period. A Medicare Supplement plan, which we’ll discuss below, can help you cover some of these costs.
Medicare pays for all covered hospital care for the first 60 days of your stay once you’ve met your Part A deductible. For 2025, the Part A deductible is $1,676. Unlike the Part B deductible, which is an annual amount, your Part A deductible needs to be met for each hospital stay. After day 60 of your hospital stay, Medicare covers all costs, minus a daily copay that you’re responsible for.
Below, we outline the copays you’ll owe based on your time in the hospital:
$0 for the first 60 days
$419 per day for days 61-90
$838 after day 90-150
You pay all costs after day 150
Medicare Part A only pays for home health care or a stay at a skilled nursing facility when the service is considered medically necessary and only needed for a short period. Keep in mind that Medicare won’t pay for any custodial care (grooming, bathing, and other personal care).
For a stay at a skilled nursing facility, Medicare pays for everything until your 20th day. After that, you’ll have daily copayments depending on how long you stay:
$0 for the first 20 days
$209.50 for days 21-100
You pay all costs after day 100
You must meet eligibility requirements before you can receive home health care coverage through Medicare. If you do meet the criteria, Medicare pays the cost of all covered home health services except for durable medical equipment (DME). Medicare pays for 80% of the cost of DME once you’ve met your Part B deductible. You’ll be responsible for the remaining 20%.
For hospice care, Medicare covers the full cost of covered services except drugs and respite care. For these, you’ll pay:
A copay of up to $5 for each prescription drug
5% coinsurance for inpatient respite care
Medicare Part B is your outpatient medical insurance. It pays for doctor visits, outpatient procedures, durable medical equipment, preventive services, and other medical services. Your general costs for Medicare Part B for 2025 are:
Monthly premium: $185
Deductible: $257
Coinsurance: 20%
For most services like doctor’s visits and procedures, Medicare Part B pays 80% of the Medicare-approved cost once you reach your annual Part B deductible. You’re responsible for the remaining 20%, which a Medicare Supplement plan can help cover.
Medicare pays 100% of the cost of some preventive services like screenings and certain vaccines. If you’re unsure if your screening is fully covered, check with your doctor or insurance.
If you have Original Medicare, a Medicare Supplement plan can help you cover the remaining costs that Original Medicare doesn’t pay. Since there are ten different types of Medigap plans, what Medicare pays and your leftover costs depend on the plan you choose.
Note that there is no longer a plan that eliminates all out-of-pocket costs if you’re new to Medicare. Plan F had the highest coverage, but this plan (along with Plan C) is unavailable for beneficiaries who turn 65 after January 1, 2020.
We typically recommend Plan G or Plan N because they offer the highest coverage at a reasonable cost. To provide an example of what these Supplement plans pay for, with a Plan G your Medicare coverage will pay all costs for covered services once you pay your premiums and Part B deductible.
Consult the chart below to learn more about what each Medicare Supplement (also called Medigap) plan type pays.
We don’t have a straight answer for how much your Medicare Advantage plan will pay for services because it varies between policies. Private insurance companies provide Medicare Advantage plans, and they can set their own pricing structures for premiums, deductibles, copays, and coinsurance. How much your Medicare Advantage plan pays for services may be different from Original Medicare, but they must cover the same services.
If you have questions about your out-of-pocket costs with a Medicare Advantage plan, it’s best to consult your summary of benefits or reach out to your insurance provider.
You can also call a licensed Medicare Advisor for any help understanding Medicare billing and costs. Get in touch today at 855-900-2427 or book a time to chat.
