Some Medicare deductibles are based on the calendar year, and one is based on a benefit period. Understanding the difference between a benefit period deductible and a calendar year deductible is important for planning your healthcare budget better.
Now that you got the basics let’s dive deeper into the details of a calendar year vs. a benefit period.
Yes, Medicare benefits follow the calendar year since benefits change at the start of each new year.
Medicare deductibles and premiums reset annually on New Year’s Day. Since the coverage resets on the 1st day of the year, that’s when you can expect deductible and premium increases to go into effect.
Beneficiaries are notified of these changes in October or November, near the middle of the Annual Enrollment Period for Medicare Advantage plans.
Medicare premiums and deductibles change in cost during the new calendar year, but benefit periods are slightly different and encompassed into the calendar year.
The Part A Medicare benefit period begins the day of your hospital or skilled nursing facility admission and ends once you’ve been out of the hospital for 60 consecutive days.
It’s possible to have multiple benefit periods during the calendar year. Multiple benefit periods mean you pay the Part A deductible more than once.
For example, you go to the hospital in February and return home for 75 days before returning. Since it’s been over 60 days since you’ve been in the hospital, you’ll be in a new benefit period and must pay the Part A deductible again.
There can be several benefit periods in the calendar year. But there is some benefit to having a Part A benefit period.
For example, if you go into the hospital on December 29 and leave the hospital on January 2, that is only one benefit period, and you’ll only pay the deductible once despite being in two different calendar years.
Lifetime reserve days cover you an additional 60 days beyond the 90 days Medicare covers you in a hospital or skilled nursing facility. So, if you’re in the hospital for 100 days, you’ll use ten lifetime reserve days.
Lifetime reserve days are only available once. Once you’ve used them up, there are no more.
The annual deductibles like the Part B or the Part D deductible reset each calendar year. So, you pay the cost of your care first. This is you meet the deductible.
Then, once you meet the calendar year deductible, you’re done until the next year. The Part A deductible is NOT a calendar year deductible. This is a deductible that applies per benefit period.
A Medicare Advantage plan mostly has copayments or coinsurances for hospital or skilled nursing facility care. In the rare case that there is a benefit period on a Part C policy, it will likely only apply to the skilled nursing facility.
Medicare Advantage plans do have a maximum out-of-pocket. Once you’ve spent so much on covered expenses for the year, the plan starts picking up the rest of the covered medical bills.
The maximum out-of-pocket (MOOP) runs on a calendar year. During the calendar year, once you spend a certain amount on covered services, around $9,000, the insurance carrier begins to pick up the rest of your covered medical bills, and you don’t pay any more out-of-pocket.
The amount you contributed to previous years won’t be applied when it comes to the maximum out-of-pocket. Only expenses from the current calendar year that Medicare approves will count toward your MOOP.
The Medicare Part A benefit period starts when you’re admitted to the hospital or skilled nursing facility, and the benefit period ends once you’ve been home for 60 consecutive days.
Then, since you’ve hit the new benefit period, if you have a medical emergency, you might need to pay a larger portion of the costs yourself.
Medicare coverage is available for the first 90 days in a hospital per benefit period. You do have an extra 60 lifetime reserve days.
The most you could stay in a hospital with Medicare covering a portion of the benefits is 150 days.
The skilled nursing facility benefit period is Part A and works similarly. Specific information about your condition may be needed to ensure eligibility for a skilled nursing facility.
Medicare Supplement insurance can cover the Part A deductible. This way, you don’t have to worry about paying multiple Part A deductibles during the year. Medigap insurance like Plan F or Plan G can leave you with little to no out-of-pocket costs.
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Written By:
Lindsay Malzone, Lindsay Malzone is the Medicare editor for Medigap.com. She's been contributing to many well-known publications since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.
Reviewed By:Rodolfo Marrero, Rodolfo Marrero is one of the co-founders at Medigap.com. He has been helping consumers find the right coverage since the site was founded in 2013. Rodolfo is a licensed insurance agent that works hand-in-hand with the team to ensure the accuracy of the content.
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