This fact sheet discusses Medicare cost-sharing requirements. Traditional fee-for-service Medicare imposes deductibles, coinsurance, and copays for Medicare services. In addition, beneficiaries must pay premiums for receiving Part B (physician) and Part D (prescription drugs) coverage. Medicare does not cover certain essential services, such as vision, dental, and long-term care expenses, and beneficiaries must pay out-of-pocket for these services.
As a consequence, health care spending currently consumes a substantial percentage of older persons’ income. In comparison, Medicare is generally less generous than plans offered by large employer health plans, as well as less generous than the federal employee health benefit plan (FEHBP standard option).