Costs Medicare Does Not Cover

Even for Medicare-eligible treatments and supplies, Original Medicare does not cover all medical expenses. Medicare enrollees are still responsible for Deductibles, Co-Payments and Co-Insurance payments to their Medicare providers.

Costs Associated with Medicare-Eligible Expenses
In certain cases, Medicare will share in the costs of certain medical expenses, but you will still be responsible for paying deductibles, coinsurance and co-payments associated with such claims.

• Deductible: In any calendar year, you are responsible for all Part B costs up to the annual deductible amount. In other words, before Medicare will share in any costs, you must first spend out-of-pocket the full amount of the deductible (for certain services, the deductible may not apply). For 2010, the annual deductible amount is $155.
• Co-Payment: Certain Medicare-eligible expenses have a co-payment amount when incurred. The co-payment is usually a set amount, rather than a percentage. For example, you might pay $10 or $20 for a doctor’s visit or prescription.
• Co-Insurance: After your deductible is hit, you are typically required to pay a percentage of Medicare-eligible expenses. Coinsurance is usually a percentage (for example, 20%).

While the definitions above are more technical in nature, here is a practical example:

• In this example, you undergo a Medicare-eligible Ambulatory Surgery procedure inside of a Medicare-approved facility.
• As of 2010, you are responsible for 20% of the Medicare-approved amount.
• Assume in this example that the Medicare-approved amount comes to $2,000.

Your out-of-pocket expenses come to the following:

• Deductible of $155 (this is assuming you have had no other expenses incurred during the year)
• Co-Insurance of $369
• This is calculated by taking a) $2,000, b) subtracting $155, and c) multiplying the difference, $1,845, by 20%.

In this example above, your out-of-pocket expenses would be $524. Depending on which Medicare Supplement plan, some or all of these out-of-pocket expenses may be covered by your insurance company.