Having a basic understanding of Medicare’s calendar year and how it works with your benefit periods will help you better prepare for any out-of-pocket medical costs. In this article, we’re covering Medicare’s calendar year, how Part A benefit periods & deductibles work, and how Medigap coverage can help pay for these deductibles.
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Does Medicare Run on a Calendar Year?
Yes, Medicare’s deductible resets every calendar year on January 1st. There’s a possibility your Part A and/or Part B deductible will increase each year. The government determines if Medicare deductibles will either rise or stay the same annually. Medicare announces Part A & Part B deductible changes each year around the end of October or the beginning of November.
How Do Medicare Benefit Periods Work?
It’s important to understand the difference between Medicare’s benefit period from the calendar year. A benefit period begins the day you’re admitted to the hospital or skilled nursing facility.
In this case, it only applies to Medicare Part A and resets (ends) after the beneficiary is out of the hospital for 60 consecutive days. There are instances in which you can have multiple benefit periods within a calendar year. This means you’ll end up paying a Part A deductible more than once in 12 months.
How Do Lifetime Reserve Days Work with Medicare?
Part A covers inpatient hospital care, skilled long-term facility, and more, for up to 90 days. But if you ever need to extend your hospital stay, Medicare will cover 60 additional days, called lifetime reserve days.
For instance, if your hospital stay lasts over 120 days, you will have used 30 lifetime reserve days. Please note that you’ll pay a coinsurance for each lifetime reserve day you use. You can only use your lifetime reserve days once.
Yearly Medicare Deductibles
The calendar-year deductible is what you must pay before Medicare pays its portion, but you will still have coverage until you reach your deductible. In 2024, the deductible for Part A is $1,632 ($1,600 in 2023), while Part B‘s deductible is $240 ($226 in 2023). The Part A deductible must be met per benefit period, not per calendar year.
Medigap Plans that Cover Medicare’s Yearly Deductibles
One way to avoid paying for deductibles is by purchasing Medicare Supplement, also called a Medigap plan. There are 12 Medigap plans, letters A-N. Each plan varies by price and benefits. All Medigap plans, with the exception of Plan A, cover the Part A deductible. Medicare cost sharing covers a percentage of the Part A deductible. Only Medigap plans C and F cover the deductible under Part B.