What is Medicare?
How does it work? What does Medicare cover? What is the cost? Is Medicare insurance? Am I automatically covered when I turn 65? What should I do first?
Though these may seem like simple questions, the answer is complex. However, you’ve boomer come to the right place for Medicare information. Let’s define Medicare coverage.
Medicare is the United States national health insurance program for people 65 and older. It is also for people with certain disabilities or end-stage kidney failure. This program is divided into various parts, and it’s important to learn how these fit together.
The Parts of Medicare - Part A, B, C, & D
What is Part A? What Does Part A Cover?
Part A is hospital insurance that assists you with the cost of inpatient care and skilled nursing facility stays. It also helps with things like hospice and home health care.
It covers the cost of your semi-private room. Part A does NOT cover many of the actual treatments that might occur, such as scans or surgeries. Those fall under Medicare Part B.
The cost of Part A for most people at age 65 is $0. This is because during your working years you have paid taxes to pre-fund the premiums for your hospital benefits. If you don’t automatically qualify for premium-free coverage, most individuals can still apply for it. You’ll pay a hefty monthly premium to get it though.
What is Medicare Part B?
Medicare Part B is your outpatient medical coverage Part B covers essentially all of your other coverage outside of your inpatient hospital fees. Without Part B, you would be uninsured for doctor’s visits (including doctors who treat you in the hospital). You would also not have Medicare coverage for lab work, preventive services, and surgeries.
More importantly, Part B covers cancer therapy and kidney dialysis. These are extremely expensive items that would cost a fortune without supplemental coverage?
The cost of Part B is set by Social Security and it changes from year to year. Individuals in higher income brackets pay more than those in lower incomes brackets. How much you pay is determined by your adjusted gross income reported to the IRS in recent years.
What is Medicare Part C?
Medicare Part C is Medicare Advantage. These plans were created under the Balanced Budget Act of 1997 and signed into law by President Bill Clinton. These plans are commonly called Part C of Medicare. Some doctor’s offices call them replacement plans. The cost of Medicare Advantage plans varies by carrier, county of residence, and plan selected.
To enroll in a Part C plan, you must first be enrolled in both Parts A and B. Even if you find a Part C plan with a very low premium, you will still pay for Part B. You must also live in the plan service area.
Once you enroll, your Medicare coverage will from the Advantage plan itself, not from the government.
The reason you don’t enroll in Part C at Social Security is that Part C is voluntary. Most people prefer to get their Medicare coverage from Original Medicare and traditional Medigap plans. These people do not want a Part C Advantage plan, so they will simply not enroll in one.
It is your choice whether you wish to opt for one as opposed to just staying with your original Medicare A & B and enrolling in Medigap.
What is Medicare Part D
Medicare Part D is the newest part of our national health insurance program for people age 65 & up. For half a century, there was no Medicare coverage for prescription medicines. In 2006, our federal government rolled out Part D.
It covers retail prescription drugs that you pick up yourself at the pharmacy or order via mail order. You choose a carrier and enroll in their drug plan, and that’s how you sign up for a Part D drug plan. Most states have about 20-30 drug plans to choose from, and the best way to determine which one is the right fit for you is to run a Part D analysis using Medicare’s prescription drug finder tool.
You can define Medicare as insurance for people over age 65 and people with certain disabilities.
What is Medicare vs Medicaid?
A common question is “What is Medicare vs Medicaid?” By definition, it is a health insurance program for the elderly. Medicaid, on the other hand, if financial and/or healthcare assistance for low-income individuals. Some people 65 and older can qualify for both. In that scenario, Medicare is primary and Medicaid is secondary.
The government has several Savings Programs that you can apply for through your state’s Medicaid office. These may help you to pay your Part B premiums as well as provide drug plan assistance. Check with your state’s Medicaid office to see if you qualify.
Get More Medicare Information
Do you need help understanding Medicare coverage? The first step is getting Medicare knowledge. Let our Certified Medicare Advisors help you learn your basic benefits, and then we can help you with choosing the appropriate supplement plan. Call the toll FREE number at the top today!
Inpatient hospital care: This is care received after you are formally admitted into a hospital by a physician. You are covered for up to 90 days each benefit period in a general hospital, plus 60 lifetime reserve days. Medicare also covers up to 190 lifetime days in a Medicare-certified psychiatric hospital.
Skilled nursing facility (SNF) care: Medicare covers room, board, and a range of services provided in a SNF, including administration of medications, tube feedings, and wound care. You are covered for up to 100 days each benefit period if you qualify for coverage. To qualify, you must have spent at least three consecutive days as a hospital inpatient within 30 days of admission to the SNF, and need skilled nursing or therapy services.
Home health care: Medicare covers services in your home if you are homebound and need skilled care. You are covered for up to 100 days of daily care or an unlimited amount of intermittent care. To qualify for Part A coverage, you must have spent at least three consecutive days as a hospital inpatient within 14 days of receiving home health care.
Hospice care: This is care you may elect to receive if a provider determines you are terminally ill. You are covered for as long as your provider certifies you need care.
Keep in mind that Medicare does not usually pay the full cost of your care, and you will likely be responsible for some portion of the cost-sharing (deductibles, coinsurances, copayments) for Medicare-covered services.
Most people do not pay a monthly Part A premium because they or a spouse have 40 or more quarters of Medicare-covered employment. If a person has less than 30 quarters of Medicare-covered employment the Part A premium is $437 per month. If a person has 30 to 39 quarters of Medicare-covered employment, the Part A premium is $240 per month.
What is Medicare Part B? Medical Insurance.
- Medicare Part B provides outpatient/medical coverage. The list below provides a summary of Part B-covered services and coverage rules:
- Provider services: Medically necessary services you receive from a licensed health professional.
- Durable medical equipment (DME): This is equipment that serves a medical purpose, is able to withstand repeated use, and is appropriate for use in the home. Examples include walkers, wheelchairs, and oxygen tanks. You may purchase or rent DME from a Medicare-approved supplier after your provider certifies that you need the service.
- Home health services: Services covered if you are homebound and need skilled nursing or therapy care.
- Ambulance services: This is emergency transportation, typically to and from hospitals. Coverage for non-emergency ambulance/ambulette transportation is limited to situations in which there is no safe alternative transportation available, and where the transportation is medically necessary.
- Preventive services: These are screenings and counseling intended to prevent illness, detect conditions and keep you healthy. In most cases, preventive care is covered by Medicare with no coinsurance.
- Therapy services: These are outpatient physical, speech, and occupational therapy services provided by a Medicare-certified therapist.
- Mental health services.
- X-rays and lab tests.
- Chiropractic care when manipulation of the spine if medically necessary to fix subluxation of the spine (when one or more of the bones of the spine move out of position).
- Select prescription drugs, including immunosuppressant drugs, some anti-cancer drugs, some anti-emetic drugs, some dialysis drugs, and drugs that are typically administered by a physician.
This list includes commonly covered services and items, but it is not a complete list. Keep in mind that Medicare does not usually pay the full cost of your care, and you will likely be responsible for some portion of the cost-sharing (deductibles, coinsurances, copayments) for Medicare-covered services.
Medicare Part B has a monthly premium. For 2020, the standard monthly premium is $144.50, but high-income seniors pay significantly more than this. At the high end, seniors with incomes over $362,000 (joint tax return) or $163,000 (individual) have to pay $462.50 per month.
In addition, Medicare Part B has an annual deductible of $198 for 2020. For the 61st through 90th days of hospitalization, beneficiaries will pay $352 per day, up from $341 in 2019, and then $704 per day for lifetime reserve days, up from $682 in 2019.
Part D, prescription drug coverage plans, come with an average monthly premium of $30.
What is Medicare Part C? Medicare Advantage Plans.
You can choose to get your Medicare coverage through a Medicare Advantage Plan (Part C) instead of through Original Medicare Parts A & B).
Medicare Advantage Plans must offer, at minimum, the same benefits as Original Medicare (those covered under Parts A and B) but can do so with different rules, costs, and coverage restrictions. You also typically get Part D as part of your Medicare Advantage benefits package (MAPD). Many different kinds of Medicare Advantage Plans are available. You may pay a monthly premium for this coverage, in addition to your Part B premium.
If you join a Medicare Advantage Plan, you will not use the red, white, and blue Medicare card when you go to the doctor or hospital. Instead, you will use the membership card your private plan sends you to get health services covered. You will also use this card at the pharmacy if your health plan has Medicare prescription drug coverage (Part D).
What is Medicare Part D? Prescription Drug Coverage.
Medicare’s prescription drug benefit (Part D) is the part of Medicare that provides outpatient drug coverage. Part D is provided only through private insurance companies that have contracts with the federal government—it is never provided directly by the government (unlike Original Medicare).
If you want to get Part D coverage, you have to choose and enroll in a private Medicare prescription drug plan (PDP) or a Medicare Advantage Plan with drug coverage (MAPD). Enrollment is optional (though recommended to avoid incurring future penalties) and only allowed during approved enrollment periods. Typically, you should sign up for Part D when you first become eligible to enroll in Medicare.
Whether you should sign up for a Medicare Part D plan depends on your circumstances. You may have creditable drug coverage from employer or retiree insurance. If so, you don’t need to enroll in a PDP until you lose this coverage. Also, some people already enrolled in certain low-income assistance programs may be automatically enrolled in a Medicare drug plan and receive additional financial assistance paying for their medicines.
What is a Medicare Supplement Plan?
Medicare Supplement Plans are health insurance policies that offer standardized benefits to work with Original Medicare (not with Medicare Advantage). They are sold by private insurance companies. If you have a supplement plan, it pays part or all of certain remaining costs after Original Medicare pays first. These plans may cover outstanding deductibles, coinsurance, and copayments and may also cover health care costs that Medicare does not cover at all, like care received when traveling abroad. Remember, Medicare Supplement Plans only work with Original Medicare. If you have a Medicare Advantage Plan, you cannot buy a Medicare Supplement Plan.
Depending on where you live, you have up to 10 different Medicare Supplement policies to choose from: A, B, C, D, F, G, K, L, M, and N (policies in Wisconsin, Massachusetts, and Minnesota have different names). Each policy offers a different set of standardized benefits, meaning that policies with the same letter name offer the same benefits. However, premiums can vary from company to company.