What does "cost-sharing" refer to in Medicare?

Cost-sharing in Medicare refers to the out-of-pocket expenses that beneficiaries incur for healthcare services. This includes costs like deductibles, which are the amounts that must be paid before Medicare starts covering expenses, and copayments or coinsurance, which are the portions of expenses that beneficiaries need to pay for specific services after the deductible has been met.

Understanding this concept is crucial, as it directly affects how much individuals will need to budget for medical care within the Medicare system. It's important to note that premiums, which are regular payments made to Medicare for coverage, are considered separately from cost-sharing. Similarly, monthly payments for Medicare Advantage plans and payments for services not covered by Medicare also do not fit the definition of cost-sharing. These elements can add complexity to a beneficiary's financial planning, but they are distinct from the concept of cost-sharing itself.