Please ensure Javascript is enabled for purposes of website accessibility

Medicare Part A: Here's What You'll Pay in 2016

By Dan Caplinger - Dec 6, 2015 at 9:02AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The program covers some hospitalization and skilled nursing care expenses, but you have to share the cost.

Medicare celebrated its 50th anniversary in 2015, and the program helps tens of millions of Americans cover their healthcare expenses. In particular, Medicare Part A coverage offers help with the expensive cost of care in hospitals and other inpatient facilities. For the vast majority of participants, Medicare Part A coverage comes with no monthly premium. Instead, Part A requires you to pay deductibles and coinsurance amounts when you actually use hospital services.

The latest Medicare cost figures for 2016 just came out, and as you'd expect, costs are heading up next year. Let's take a closer look at exactly what Medicare Part A participants will pay next year.

What Medicare Part A covers
Medicare Part A covers many of the services you need on an inpatient basis. It covers semi-private rooms, meals, general nursing, drugs received as part of your inpatient treatment, and other hospital services. Coverage takes effect when a doctor officially orders that you need to stay overnight for at least two nights for medically necessary care that can be given only in a hospital. Skilled nursing care is also included, as are long-term care hospitals for serious medical conditions that are expected to improve over time, and allow the patient to return home.

For separate skilled nursing facilities, Medicare requires that you have a qualifying hospital stay of at least three days of inpatient care associated with your admission to the facility. In addition, your doctor needs to determine that you need daily skilled care by qualified staff.

What you'll pay for inpatient services under Medicare Part A
Medicare Part A charges an upfront deductible that participants must pay before inpatient hospital coverage kicks in. For 2016, that deductible is $1,288, which is up $28 from 2015.

At that point, Medicare pays all of the allowed costs of hospital care for the first 60 days of your stay. From the 61st to the 90th day of your hospital stay, Medicare still covers most of the cost, but you'll have to pay a daily coinsurance amount. That figure is $322 per day for 2016, up $7 from this year.

Beyond the 90th day of a hospital stay, you've used up all of your annual benefits under Medicare. However, Medicare entitles you to a lifetime reserve of up to 60 additional days of care. The coinsurance amount on these reserve days is double the figure for the 61st to 90th days, making the cost next year $644 per day, up $14 from 2015.

Image based on Medicare data.

For skilled nursing facilities, the calculations are slightly different. Medicare covers all costs for the first 20 days of skilled nursing care, with no deductible because the required hospital stay related to the skilled nursing facility admission involved the hospital deductible. From the 21st to 100th day, you'll pay a coinsurance amount of $161 per day in 2016. That's up $3.50 from 2015. After the 100th day, you're responsible for all costs, and there's no provision for lifetime reserve days for skilled nursing facilities.

Image based on Medicare data.

Hospital and skilled nursing facility charges can be astronomical, and Medicare pays the lion's share of costs for these expenses. Nevertheless, as you can see above, you'll still be responsible for paying a substantial amount of money for your medical care in an inpatient facility. Making sure you understand the risks involved can help you with the decision of whether to get additional insurance coverage in retirement, either through a Medigap supplemental policy or by using a Medicare Advantage plan to provide further benefits.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.