What Is a Medicare Copayment?
There are generally no copayments with Original Medicare — Medicare Part A and Part B — but you may have coinsurance costs. You may have a copayment if you have a Medicare Advantage plan or Medicare Part D prescription drug plan. The amount of your copayment in those cases varies from plan to plan.
What Is a Medicare Copayment?
A Medicare copayment is a fixed, out-of-pocket expense that you have to pay for each medical service or item — such as a prescription you receive if you have a Medicare Advantage plan or a Medicare prescription drug plan. Your Medicare plan pays the rest of the cost for the service.
- A fixed amount of money you pay for each medical service or item, like $25 for each doctor’s visit or prescription.
- A percentage, such as 20 percent of the cost of a service or item, that you have to pay after you’ve met your deductible.
- The amount you have to pay out of pocket until your coinsurance kicks in.
Because they are private insurers, they are able to set their own amounts for copayments. These amounts are generally based on where you live, the amount of benefits you receive and the type of plan you’ve purchased.
Coinsurance and Copayments Under Medicare
Typically, you will be responsible for a copayment if you have a Medicare Advantage or Part D prescription drug plan. And you will have to pay coinsurance if you have Original Medicare — Medicare Part A and Part B.
- Medicare Part A
- In 2021, you will pay no copay but will owe coinsurance for inpatient hospital stays after you reach your deductible of $1,484 for each benefit period. Coinsurance starts at $371 per day after 60 days in the hospital and increases to $742 per day after 90 days. You must pay all costs after exhausting your lifetime reserve days.
- Medicare Part B
- You will have no copay for outpatient services that Medicare covers. But you will have to pay coinsurance of 20 percent of the Medicare-approved costs for services after you meet your yearly deductible – $203 in 2021.
- Medicare Advantage
- Medicare Advantage plans have to cover everything Medicare Part A and Part B cover. But these plans may provide you with additional benefits including dental, vision, hearing and prescription drugs. You will have to pay any copayments associated with primary care doctor and specialist visits as well prescriptions. The amount varies according to your plan.
- Medicare Part D
- Your copayment will vary depending on your plan and the medications you are prescribed. Each plan uses a different formulary — or list of drugs it covers. And the drugs are arranged in tiers with different copayment or coinsurance amounts. In 2021, once you spend $4,130 on prescriptions, you will pay no more than 25 percent of the cost until your spending totals $6,550.
Medigap Helps Cover Medicare Copayments
There are 10 standardized Medigap plans available in most of the United States. These plans help you pay out-of-pocket costs associated with Original Medicare.
Most Medigap plans cover some or all of the costs of your Medicare Part A and Medicare Part B deductibles, copayments and coinsurance. Two of the 10 plans cover either 50 or 75 percent of copayment and coinsurance costs.
You cannot, however, buy a Medigap plan if you have a Medicare Advantage plan.
7 Cited Research Articles
- U.S. Centers for Medicare & Medicaid Services. (2020, December). 2021 Medicare Costs. Retrieved from https://www.medicare.gov/Pubs/pdf/11579-medicare-costs.pdf
- Blue Cross Blue Shield of Michigan. (2017, November 20). How Do Copays, Coinsurance and Deductibles Work With Medicare Plans? Retrieved from https://www.bcbsm.com/medicare/help/faqs/works/copays-coinsurance-deductibles.html
- U.S. Centers for Medicare & Medicaid Services. (n.d.). Medicare Costs at a Glance. Retrieved from https://www.medicare.gov/your-medicare-costs/medicare-costs-at-a-glance
- U.S. Centers for Medicare & Medicaid Services. (n.d.). Copayment/Coinsurance in Drug Plans. Retrieved from https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/copaymentcoinsurance-in-drug-plans
- Healthcare.gov. (n.d.). Copayment. Retrieved from https://www.healthcare.gov/glossary/co-payment/
- Healthcare.gov (n.d.). Coinsurance. Retrieved from https://www.healthcare.gov/glossary/co-insurance/
- Healthcare.gov. (n.d.). Deductible. Retrieved from https://www.healthcare.gov/glossary/deductible/