Medicare Copayments, Coinsurance, and Annual Deductibles Explained

Last Updated : 10/25/20194 min read

Medicare may cover many of your medical expenses. However, you may also have to pay some out-of-pocket costs, such as Medicare copayments, coinsurance, and deductibles. By understanding the cost of your Medicare coverage under Original Medicare, Part A and Part B, you can budget for your costs throughout the year.

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What is Medicare coinsurance?

Medicare coinsurance is a percentage of the total Medicare-approved amount you generally pay for a covered doctor visit or service. Some services don’t require a Medicare coinsurance or copayment.

Once you’ve met your Medicare Part B annual deductible, your Medicare coinsurance is generally 20% for most covered Part B services. Medicare typically picks up the other 80%.

How does Medicare coinsurance differ from Medicare copayments?

A Medicare copayment is a fixed amount you might pay for prescription drugs under Medicare Part D. In some cases, you might make a copayment instead of coinsurance when you have a doctor visit, go to the hospital or purchase a medication.

Some Medicare Advantage plans may also charge coinsurance instead of copayments. For example, instead of paying a $10 copayment for your medication, you might be charged 20% of the total Medicare-approved cost. Medicare Advantage plans might have copayments, coinsurance, or a combination of the two. You will need to read your plan carefully to know where your coverage ends and where your costs begin.

Some stand-alone Medicare Part D prescription drug plans may charge coinsurance instead of copayments— The amount you pay for Part D deductibles, copayments, and/or coinsurance varies by plan. A formulary is a list of prescription drugs the plan covers which usually includes cost information such as what copayment of coinsurance you’ll pay for each medication.

It is unlikely you would have to pay both a copayment and coinsurance for the same service. Hospital costs associated with Medicare Part A may also be referred to as coinsurance, even though the charges are often flat rates instead of percentages.

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What is an annual deductible?

Your Medicare annual deductible is the amount you must pay out-of-pocket before your coverage benefits kick in.

  • The annual deductible for Medicare Part B is $185 for 2019. Once you pay this, you will likely pay a 20% coinsurance for covered Part B services for the rest of the year.
  • The deductible for Medicare Part A is $1,364 per benefit period for 2019. The deductible covers your hospital expenses for the first sixty days you are in the hospital. After sixty days, you will pay a daily Medicare copayment of $341 in 2019. After ninety days, the daily copayment increases to $682 for the same year.

Medicare Part A may also cover skilled nursing care. If you need more than 20 days of care, and you meet Medicare coverage requirements, the daily Part A copayment for 2019 will be $170.50. This Medicare copayment typically extends for up to 100 days of nursing care.

The average deductibles for Part D plans increased from $292 to $308 in 2019, according to eHealth research.

Managing your Medicare costs

You may be able to buy insurance to help with costs like your Medicare copayment and/or coinsurance. Medicare Supplement insurance plans are designed to pay some or all of the out-of-pocket costs left by Original Medicare.

You need to be enrolled in Medicare Part A and Part B to buy a Medicare Supplement insurance plan. This type of plan might cover costs like Medicare copayments, coinsurance, and deductibles. Read more about Medicare Supplement insurance.

Looking for a Medicare insurance plan in your area? Our online plan finder can help. Enter your zip code in the box on this page and the tool will walk you through the steps to find the right plan for you.

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