Medicare information can come with a lot of unfamiliar language. Understanding a few common terms can make it easier to compare coverage and anticipate costs.
Premium
A premium is the amount you pay regularly to have coverage, usually each month.
For example, most people pay a monthly premium for Medicare Part B. Depending on your choices, you may also pay a premium for a Medicare Advantage plan, prescription drug plan, or Medicare Supplement policy.
Deductible
A deductible is the amount you pay for certain covered services before your coverage begins paying its share.
For example, if a plan has a $200 deductible for a type of service, you may need to pay the first $200 of covered costs before the plan begins sharing those costs. Actual deductibles and rules depend on the coverage.
Copayment
A copayment, or copay, is a fixed amount you pay for a covered service.
For example, a plan might require a $30 copay for a specialist visit. The amount varies by plan and service.
Coinsurance
Coinsurance is a percentage of the cost of a covered service that you pay.
For example, if your coinsurance is 20% of a Medicare-approved amount of $100, your share would generally be $20 after any applicable deductible.
Out-of-pocket maximum
An out-of-pocket maximum is a limit on what you pay for certain covered services during a plan year. Medicare Advantage plans have a limit for covered Part A and Part B services. Premiums and some other expenses do not count toward that limit.
Original Medicare does not have an annual out-of-pocket maximum for Part A and Part B services.
Understanding these terms can help you look beyond the monthly premium and compare the full cost of coverage.
Have questions about what you may pay? Contact our office at (210) 744-0553 for help reviewing your Medicare options.