Medicare Part A covers acute hospital care, a limited number of skilled nursing facility days, home health care and hospice care. However, the patient must pay the following deductibles:

Maximum Medicare Coverage for Hospital Care (2010)

Days in Hospital	How Much You Pay	How Much Medicare Pays
First 60 days	$1,100 for first day	Balance
61-90 days	$275/day	Balance
91-150 days	$550/day	Balance
After 150 days	All costs	Nothing

Medicare Part A will pay all the costs for a covered skilled nursing home stay for the first 20 days and all but $137.50 per day in 2010 for up to an additional 80 days. Medicare Part B will have an annual deductible requirement of $155 in 2010. Each year, before Medicare pays anything, the patient must incur medical expenses equal to the deductible, based on Medicare’s approved reasonable charge, not on the provider’s actual charge. In addition, there is a coinsurance amount which the patient must pay. This is equal to 20 percent of the Medicare approved amount. Most Medicare Beneficiaries will continue to pay the same $96.40 Part B premium amount in 2010. Beneficiaries who currently have the Social Security Administration withhold their Part B premium and have incomes of $85,000 or less (or $170,000 for joint filers) will not have an increase in their Part B premium. New Part B beneficiaries will pay $110.50 per month because they were not having their premium deducted from their Social Security. Individuals with annual incomes greater than $85,000 and less than $107,000 and married couples with annual incomes greater than $170,000 and less than $214,000 in 2010 will pay a monthly premium of $154.70 each. Individuals with annual incomes greater than $107,000 and less than $160,000 and married couples with annual incomes greater than $214,000 and less than $320,000 in 2010, will pay a monthly premium of $221.00 each. Individuals with annual incomes greater than $160,000 and less than $214,000 and married couples with annual incomes greater than $320,000 and $428,000 in 2010 will pay a monthly premium of $287.50 each. Individuals with annual incomes greater than $214,000 and married couples with annual incomes greater than $428,000 in 2010 will pay a monthly premium of $353.60. The income test is determined from the gross income reported by the Medicare beneficiary on his or her income tax return filed 3 years ago.

Medicare Part D provides limited financial assistance with drug expenses to persons enrolled under Medicare Part A or Part B who pay the additional Part D premium to a private company. These prescription drug plans offered pursuant to Medicare Part D is provided by private companies. Thus, a person eligible for Medicare must affirmatively enroll in a voluntary prescription drug coverage program under Medicare Part D for one year at a time. Medicare Advantage Plans normally provide prescription coverage. The monthly premium that a Medicare beneficiary will have to pay monthly for Part D drug benefit varies from company to company and depends on the formulary being provided by that company. A Medicare beneficiary who elects to pay this premium will then pay an annual deductible for prescriptions. The annual deductible for 2010 is the first $310 of prescription drug expenses incurred during 2010 for drugs on the plans list of covered drugs or formulary. This annual deductible will increase each ensuing year. The enrolled Medicare beneficiary then pays a coinsurance amount equal to 25 percent of his or her prescription costs, for formulary drugs, in excess of the annual deductible up to the initial coverage limit in 2010 of $2,830. The Medicare beneficiary’s prescription drug plan sponsor is to pay the remaining 75 percent until total drug expenses paid for by the plan and the beneficiary reach $2,830. The enrolled Medicare beneficiary then pays the next $3,610.00, in prescription drug expenses in 2010 before receiving any additional financial assistance. This additional prescription drug expense to the Medicare beneficiary is referred to as the doughnut hole since the plan pays nothing toward this additional prescription drug expense. There is no additional prescription drug assistance until an enrolled Medicare beneficiary’s annual prescription drug expense for formulary drugs and monthly expenses exceeds $4,550 in 2010 plus his or her monthly premiums. A person with total prescription drug expenses for formulary drugs exceeding $6,550.00 in a year then pays a co-payment of $2.50 for each generic drug and $6.30 for any other drug prescription, or 5 percent of the cost of the prescription drug, whichever is greater.

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