The cost of Medicare health insurance usually involves costs such as monthly premiums, yearly deductibles, copays, and coinsurance.
Medicare coinsurance is the share of the medical costs that you pay after you’ve reached your deductibles.
Keep reading to learn more about Medicare coinsurance and how much you might pay based on the plans you’re enrolled in.
Although original Medicare (part A and part B) covers most of your medical costs, it doesn’t cover everything. Medicare pays a portion of your medical costs, and you’re responsible for the remaining amount.
With coinsurance, you pay a fixed percentage of the cost of every medical service you receive. Your insurance company is responsible for the remaining percentage. This is different from a copay or copayment, where you pay a set fee for a service, such as $15 for a primary care visit.
You can either pay out of your pocket or purchase a Medicare supplement (Medigap) plan to cover these costs.
Medicare Part A coinsurance
If you have Medicare Part A and are admitted to a hospital as an inpatient, this is how much you’ll pay for coinsurance in 2021:
- Days 1 to 60: $0 daily coinsurance
- Days 61 to 90: $371 daily coinsurance
- Day 91 and beyond: $742 daily coinsurance per each lifetime reserve day (up to 60 days over your lifetime)
If you’re admitted to a skilled nursing facility, this is the breakdown of 2021 coinsurance costs:
- Days 1 to 20: $0 daily coinsurance
- Days 21 to 100: $185.50 daily coinsurance
- Day 101 and beyond: all costs
Medicare Part B coinsurance
With Medicare Part B, after you meet your deductible ($203 in 2021), you typically pay 20 percent coinsurance of the Medicare-approved amount for most outpatient services and durable medical equipment.
Example scenario with Part B
You’re enrolled in original Medicare, and you visit your doctor for a $500 outpatient treatment. Your doctor appointment is covered by Medicare Part B. Your doctor bills Medicare for $500.
In 2021, Part B carries an annual deductible of $203, so you’re responsible for paying this amount toward Part B-covered services for the year.
After paying the Part B deductible, the remaining $297 of your bill is covered in part by Medicare and in part you through coinsurance.
Your share is 20 percent coinsurance of $59.40, and Medicare Part B’s share is 80 percent, or $237.60.
On the next $500 bill for the same treatment from the same doctor, you’ll have already paid your Part B deductible, so Medicare will pay 80 percent ($400) and you will pay 20 percent ($100).
Medicare Advantage coinsurance
The type pf Medicare Advantage (Part C) plan you choose can also have an impact on whether you’ll pay coinsurance of copays for different services. If you’re on an HMO or PPO plan but choose to visit an out-of-network provider, this can increase your costs.
The good news is that all Medicare Advantage plans have a out-of-pocket maximum. This is a set amount that you will pay out of pocket. Once you spend this amount, the insurance company will cover any other costs for the year at 100%. The out-of-pocket max amount varies but can range from the low thousands to upward of $10,000-plus.
Medicare supplement or Medigap plans cover various types of Medicare coinsurance costs.
The coinsurance costs these types of plan can cover include:
- Part A coinsurance and hospital costs up to 365 days after you’ve used up your Medicare benefits
- Part A hospice coinsurance
- Part B coinsurance
- skilled nursing facility coinsurance
Plan A is often the cheapest plan with the least coverage, while plan G and plan N are some of the most comprehensive options available today.
With original Medicare (parts A and B), once you’ve reached your deductibles, Medicare pays a share of the cost of Medicare-approved treatments and you pay a share. Coinsurance is your share of the costs.
You can either pay the coinsurance out of your pocket or purchase a Medicare supplement (Medigap) plan to cover all or part of it.