Medicare is a federal health insurance program for people who are 65 or older, people with certain disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant), also called ESRD. The administration of the program is handled by the Centers for Medicare & Medicaid Services (CMS). There are four parts to Medicare coverage: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage plans), and Part D (drug coverage).
Medicare Part A
Medicare Part A, also known as hospital insurance, offers coverage for inpatient hospital care, hospice care, skilled nursing facility care, and certain home healthcare services.
When you are hospitalized, Part A covers semi-private rooms, meals, general nursing, and other hospital services and supplies. It also covers the cost of care in critical access hospitals and inpatient rehabilitation facilities.
Part A also covers hospice care for individuals with a terminal illness who no longer seek curative treatment. This type of care includes pain management and symptom control, as well as emotional and spiritual support for the patient and their family.
Skilled nursing facility care is also covered under Part A. This type of care is for individuals who need ongoing care but do not require hospitalization. This care includes things like physical therapy, occupational therapy, and speech-language therapy.
Additionally, Part A covers some home health care services like physical therapy, occupational therapy, and speech-language therapy. Home health care services are typically for individuals who are recovering from an illness or injury and need ongoing care but do not require hospitalization.
To be eligible for Medicare Part A, you must be at least 65 years old and have paid into the Medicare system through payroll taxes while working, or you must be under 65 and have a disability or ESRD. You do not have to pay a premium for Part A coverage if you meet these eligibility requirements, but you may have to pay a deductible, coinsurance, or copayments for some services.
It’s important to note that Medicare Part A does not cover all medical expenses. It does not cover things like most prescription drugs, long-term care, or routine dental care. However, you can purchase additional coverage through Medicare Part B, Part D, or private insurance to help cover these costs.
Medicare Part B
Medicare Part B is one of the two parts of Original Medicare, the federal health insurance program for people 65 or older or with certain disabilities or conditions. Part A, which is hospital insurance, is generally provided without a premium and covers things like inpatient hospital stays, hospice care, and some home health care. Part B, on the other hand, is typically a separate premium-based coverage that is intended to cover medical services and equipment that are not covered by Part A.
Some of the services that are typically covered by Medicare Part B include:
- Doctor visits: Part B covers visits to primary care physicians as well as specialists. This includes preventive services, such as annual wellness visits and certain cancer screenings.
- Laboratory tests: Part B covers a wide range of laboratory tests, including blood tests, pathology, and diagnostic imaging services.
- Medical equipment: Part B covers a wide range of medical equipment, including things like wheelchairs, walkers, and hospital beds. It also covers things like prosthetic devices and orthotic devices.
- Preventive services: Part B covers certain preventive services, such as flu shots, pneumonia shots, and bone density tests.
However, it’s important to note that while Part B covers a wide range of services, it does not cover everything. For example, it generally does not cover long-term care or custodial care services, such as those provided in a nursing home. Additionally, it typically does not cover services that are considered experimental or investigational.
In terms of cost, beneficiaries typically pay a monthly premium for Part B coverage. The amount of the premium depends on a variety of factors, such as your income and whether you are already receiving Social Security benefits. For most people, the premium is currently set at $164.90 per month, but it can be higher or lower depending on your specific circumstances. In addition to the premium, you will also be responsible for paying coinsurance or copayment for each service you receive. This means that you will pay a certain percentage of the cost of each service, with Medicare picking up the rest.
Medicare Part C
Medicare Part C, also known as Medicare Advantage, is an alternative to Original Medicare (Parts A and B) that is offered by private insurance companies that contract with Medicare. Medicare Advantage plans provide the same benefits as Original Medicare, but they may also offer additional coverage, such as prescription drug coverage, and vision and dental coverage. Some Medicare Advantage plans also offer additional benefits, such as wellness programs or gym memberships.
One of the main differences between Original Medicare and Medicare Advantage is the way that the plans are structured. With Original Medicare, you generally have more flexibility to see any doctor or hospital that accepts Medicare. With Medicare Advantage, however, you will typically be required to see doctors and hospitals within the plan’s network to receive coverage.
Another major difference is that with Original Medicare, beneficiaries are responsible for paying for a percentage of their medical costs. For example, for each doctor visit, you’ll pay a set copayment, and for each hospital stay, you’ll pay a set coinsurance. With Medicare Advantage plans, the cost-sharing is different and could include a monthly premium, yearly deductible, copayments, and/or coinsurance.
Costs also differ between Original Medicare and Medicare Advantage. With Original Medicare, beneficiaries typically pay a monthly premium for Part B coverage, as well as coinsurance or copayment for each service they receive. With Medicare Advantage, you typically pay a monthly premium, but it could be lower than the combined cost of Part A and B premiums. The cost of the plan will vary depending on the plan and your location.
It’s important to note that Medicare Advantage plans are not available to everyone. To enroll in a Medicare Advantage plan, you must first be enrolled in Original Medicare, and you must live in an area where the plan is offered. Additionally, some plans may have additional eligibility requirements. If you are interested in a Medicare Advantage plan, it’s a good idea to shop around and compare different plans to see which one best meets your needs.
Medicare Supplements, also known as Medigap, are private insurance policies designed to fill in the gaps in coverage left by Original Medicare (Parts A and B). They help cover out-of-pocket costs such as deductibles, coinsurance, and copayments. There are ten standardized Medigap plans labeled A through N, each offering a different level of coverage.
Plan A offers the most basic coverage, including hospitalization and medical expenses, while Plan F provides the most comprehensive coverage, including all gaps in Original Medicare.
Plan B covers just hospitalization, Plan C covers hospitalization and skilled nursing facility care, Plan D covers hospitalization, medical expenses, and the Part B deductible, and so on.
Each plan has its own unique benefits, and beneficiaries can choose a plan that best meets their specific needs and budget. It’s important to note that Medicare Supplements only work with Original Medicare and do not cover prescription drugs, so beneficiaries with prescription drug needs may want to enroll in a Medicare Part D plan in addition to a Medigap plan.
Beneficiaries with Medicare Advantage plans cannot enroll in a Medicare Supplement. To be eligible for a Medicare Supplement, beneficiaries must be enrolled in both Medicare Parts A and B and reside in the plan’s service area.
Medicare Part D
Medicare Part D is a separate federal program that provides prescription drug coverage for people enrolled in Original Medicare (Parts A and B). It is also available to people enrolled in Medicare Advantage plans that don’t already include prescription drug coverage. Part D coverage is offered by private insurance companies that contract with Medicare.
Part D plans typically cover a wide range of prescription drugs, including both brand-name and generic drugs. The specific drugs covered by each plan can vary, and plans may also have different costs, such as monthly premiums, deductibles, and copayments. Some plans may also have a “formulary” list which means it’s a list of drugs that the plan covers, and it could be different from one plan to another.
Enrolling in a Part D plan is voluntary, but if you choose not to enroll in a plan when you first become eligible for Medicare, you may have to pay a penalty if you decide to enroll later on. Additionally, if you don’t enroll in a Part D plan when you are first eligible, you may have a gap in your coverage, known as the “coverage gap” or “donut hole,” where you’ll be responsible for paying a larger portion of the cost of your prescription drugs.
To enroll in a Part D plan, you’ll need to choose a plan that is offered in your area and enroll during the annual enrollment period, which typically runs from October 15 to December 7 each year. You can also make changes to your plan during this period if you want to switch to a different plan or if your current plan is discontinued.
There are several different enrollment periods for Medicare, depending on the type of coverage you are seeking and your circumstances. Some of the key enrollment periods include:
- Initial Enrollment Period (IEP): The IEP is the seven months surrounding your 65th birthday, during which you can enroll in Original Medicare (Parts A and B). This period begins three months before your birth month and ends three months after your birth month. If you are already receiving Social Security benefits when you turn 65, you will automatically be enrolled in Original Medicare.
- Annual Enrollment Period (AEP): The AEP is a period each year during which you can make changes to your Medicare coverage. This period runs from October 15 to December 7 each year. During the AEP, you can enroll in a Medicare Advantage plan, switch from one Medicare Advantage plan to another, or switch from a Medicare Advantage plan back to Original Medicare. You can also enroll in a Medicare Part D prescription drug plan or change your existing Part D coverage.
- General Enrollment Period (GEP): The GEP is a period each year during which people who did not enroll in Medicare during their Initial Enrollment Period can enroll in Original Medicare (Parts A and B). The GEP runs from January 1 to March 31 each year, and coverage begins on July 1 of that year.
- Special Enrollment Period (SEP): A Special Enrollment Period (SEP) is a time outside of the regular enrollment periods during which you can make changes to your Medicare coverage. This period can be triggered by certain life events, such as moving to a new area, losing employer coverage, or experiencing a change in your health status.
It’s important to note that there are different rules and deadlines for each of these enrollment periods, and you may be subject to penalties if you do not enroll during the appropriate period. Additionally, some of the enrollment periods may not be available to you depending on your circumstances.
As already established most people qualify for Part A free premium. However, if you didn’t work long enough and paid Medicare taxes you will responsible for paying Part A premium. If you have worked through 30 to 39 quarters you will have to pay 278$. If you have worked less than 30 quarters you will have to pay the full amount which is 506$. However, every Medicare beneficiary is responsible for paying the Part B premium which is 164.90$.
Other costs you are responsible for are Part A and Part B deductibles. Part A is your hospital deductible and it is 1600$ per each benefit period. Part B deductible is an annual deductible which is 226$. After you meet the deductible your Part B coverage starts.
Medicare Part C costs can vary, and they may include a monthly premium in addition to deductibles, copays, and coinsurance. With Medicare Advantage plans, you will generally have more out-of-pocket costs than with Original Medicare. However, with Medicare Advantage, you are still responsible for paying Part B monthly premium.
The costs associated with Medicare Part D can vary depending on several factors, including the specific plan that a person chooses, their income level, and the drugs that they need to take.
There are two main types of costs associated with Medicare Part D: the monthly premium and the cost-sharing. The monthly premium is the amount that a person pays each month to participate in the plan. The cost-sharing is the amount that a person pays when they get their prescriptions filled. This can include deductibles, copays, and coinsurance.
For most people, the monthly premium for Medicare Part D is relatively low, typically around $30 to $40 per month. However, for people with higher incomes, the premium may be higher. Additionally, some people may have to pay additional fees, such as a late enrollment penalty, if they do not enroll in a plan when they first become eligible.