What is Medicare?*
Medicare is the federal health insurance program for people 65 and over; for individuals who receive disability benefits through Social Security; and those with Lou Gehrig’s or End Stage Renal Disease. There are four parts to Medicare: A, B, C, D. Parts A and B are known as Original Medicare. They are administrated by the federal government. Parts C and D are offered by private insurance companies.
Four Parts of Medicare
Part A (Hospital Insurance): Covers acute care hospitalization, skilled nursing care, and hospice. Part A is premium free if you’ve worked ten years in the United States and paid into Social Security. But Part A is not completely free. If you’re admitted into the hospital, you will be charged $1,736.00 for the first 60 days. This is your Part A deductible. If you are readmitted 61 days later, you will be charged another $1,736.00. If you exceed a 60 day continuous stay, you will be charged $434.00 daily through Day 90. The Part A deductible and daily rate is reset every year. If you are paying a premium for Part A, this is reset annually as well.
Part B (Medical Insurance): Covers outpatient care. Examples: physician visits; laboratory work; diagnostic testing; outpatient surgery; emergency room; and ambulance. Medicare pays 80%. Your share is 20%. The standard monthly premium is $202.90 and is deducted from your Social Security check.** If you don’t receive Social Security, you are billed quarterly. Part B’s annual deductible is $283.00. The premium and deductible are reset every year. Unless you have employer insurance, or other credible coverage as defined by Medicare, you risk a lifetime penalty if you don’t enroll in Part B when first eligible.
Q. Can I get medical coverage with just Parts A and B?
A. Yes, but Parts A and B can be expensive. If you want to reduce the cost of your medical coverage, consider a Medicare Advantage or a Medicare Supplement Plan.
Part D: (Prescription Coverage): Covers prescription drugs and a number of vaccines. Most plans have a premium. Many come with a deductible. Unless you have employer insurance, or other credible coverage, as defined by Medicare, you risk a lifetime penalty if you decline Part D.
Part C: (Medicare Advantage): Medicare Advantage plans include all the benefits of Original Medicare but at a lower cost. For example, some Medicare Advantage plans, have a $0 copay for a hospital admission. Most Medicare Advantage plans include prescription coverage (Part D). They also include benefits that are not part of Original Medicare, such as routine dental, vision and hearing; health club memberships; and complimentary meal delivery after a hospital or skilled nursing facility discharge. Monthly premiums can be as low as $0. To be eligible for Medicare Advantage, you must have Medicare Part A and Part B.
There are many cost advantages to Medicare Advantage but they come with important restrictions. They have provider networks. A network is formed when medical professionals, facilities, and medical companies contract to do business with the plan. A network may limit the number of providers you can see. If you leave the county of your residence, may Medicare Advantage plans only cover urgent or emergency care. Many Medicare Advantage plans require a referral from your primary care doctor to see a specialist. This said, some Medicare Advantage plans are more flexible. Please check your plan’s Summary of Benefits and Evidence of Coverage for a complete list of benefits, including travel privileges.
Medicare Supplement Insurance
Like Medicare Advantage, Medicare Supplement plans reduce the costs associated with Parts A and B. But they do so in a different way than Medicare Advantage. For a detailed description of Medicare Supplement Insurance, go to my blog on this topic.
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**Depending on your income, your Part B premium may be higher than $202.90. If you are eligible for full Medicaid, or participate in a Medicare Savings Program, in most cases you won’t pay the Part B premium.