The Center for Medicare and Medicaid Services (CMS) recently published updated beneficiary cost-sharing and premium requirements for those enrolled in Original Medicare during a calendar year (CY) 2014. Under original Medicare Parts A and B, beneficiary cost-sharing is a significant component of the program. This cost-sharing is expressed primarily in the form of deductibles and coinsurance under each part, as well as monthly premium payments for Part B coverage.
Although these cost-sharing requirements have been an integral part of original Medicare since its inception, they often come as a shock to many Medicare beneficiaries. It is important for beneficiaries to be aware of their potential financial liability, preferably before the services are delivered, so that they can include liability for such amounts as one factor in their health care decision-making. Many beneficiaries choose to enroll in Medicare supplement plans to meet at least part of these cost-sharing responsibilities.
Each year, CMS calculates the beneficiary cost-sharing amounts necessary to maintain the financial viability of original Medicare for the upcoming calendar year. Under Part A, beneficiaries have 90 covered inpatient hospital days per benefit period. For the first 60 covered inpatient hospital days during that benefit period, they are obligated to pay only a single inpatient hospital deductible. For the next 30 covered inpatient hospital days during that benefit period, they are obligated to pay a daily coinsurance equal to 25% of the inpatient deductible. Beneficiaries also have 60 lifetime reserve days that they may draw upon if they exhaust their 90 regular covered days during a benefit period. For each covered lifetime reserve day used, beneficiaries are responsible for a daily coinsurance equal to 50% of the applicable inpatient deductible.
With respect to inpatient skilled nursing facility (SNF) days, beneficiaries are eligible for 100 covered inpatient SNF days per benefit period, for which they owe a daily coinsurance of 12.5% of the applicable deductible for days 21-100.
Under Part B, beneficiaries are responsible for a single annual deductible for all services covered under Part B. They are also generally responsible for additional coinsurance, which may vary depending upon the type of services furnished and the entity/practitioner who furnished those services.
For CY 2014, Medicare has released the following cost-sharing requirements, in comparison to those in effect for CY 2013.
Per benefit period, 90 covered inpatient
- Inpatient hospital deductible: $1,184.00 (2013) $1,216.00 (2014)
- (single deductible for days 1-60)
- Inpatient hospital coinsurance: $ 296.00 (2013) $ 304.00 (2014)
- (daily coinsurance for days 61-90)
Lifetime reserve days, 60 additional: $592.00 (2013) $ 608.00 (2014)
- Inpatient hospital covered days
- (daily coinsurance)
Per benefit period, 100 covered inpatient: $148.00 (2013) $ 152.00 (2014)
- SNF days
- (daily coinsurance for days 21-100)
Annual deductible: $ 147.00 (2013) $ 147.00 (2014)
Monthly premium: $ 104.90 (2013) $ 104.90 (2014)