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Now let’s talk about what you actually get out of Medicare!
Under Medicare, there are four Parts (A, B, C, and D) as well as supplemental options. Parts A and B make up what is known as “Original Medicare”:
You might be thinking, “Well Parts A and B are all I need! What else could I possibly need other than doctors and hospitalization?” Well unfortunately for you, the services Parts A and B cover are only a portion of your medical costs. By only enrolling in Original Medicare and not enhancing your Medicare coverage, you are leaving yourself exposed to huge financial risk.
What do Medicare Part A & Part B Cover?
- Skilled Nursing Facilities
- Doctor Visits
- Outpatient Care
- Preventative Care
- ‘Welcome to Medicare’ Exam
- Annual ‘Wellness’ Visit
- Laboratory Test (like blood work)
- Ambulance Services
- Durable Medical Equipment & Prosthetics
- Mental Health Care
- Some Medications
What do Medicare Part A & Part B NOT Cover?
- Long-Term Nursing Homes
- Acupuncture and ‘Alternative Medicine’
- Cosmetic Surgery
- Hearing Aids
- Dental Care and Dentures
- Care Outside of the USA
Part A and Part B: “Original Medicare”
“Original Medicare” is made up of two parts: Part A and Part B, which provide minimal coverage on their own. Services covered under Part A and Part B can have high out of pocket costs that need to be met by you, the Medicare beneficiary. Everyone eligible for Medicare is required to have Part A, Part B, and a Medicare prescription drug plan (also known as Part D). People who do not enroll in Medicare must have another form of “creditable” coverage, such as coverage through a group employer plan. If you don’t have all three parts of Medicare or another type of creditable coverage, you could face late enrollment penalties when you enroll at a later time.
Having “Original Medicare” only may leave you exposed to huge financial risk. High deductibles, co-pays, and coinsurance can leave you with expensive bills that you are responsible for. Enrolling in a plan to enhance your coverage, such as a Medicare Supplement or Medicare Advantage plan, can greatly reduce financial risk — but depending on the plan you choose, you could be limited to only a few doctors and hospitals (Medicare Advantage plans have very small networks). For more information about Medicare Supplement (also known as MediGap) plans, click here.
Part A covers hospitalization, skilled nursing facilities, and hospice care. Most people pay $0 for their Part A premium. You may become eligible for Medicare Part A by “ageing in” at age 65, or if you or your spouse have legally worked for at least 40 quarters (ten years) and have paid your Medicare taxes. Some others become eligible due to disability or certain illnesses. Once enrolled in Part A, you do not need to reapply each year.
You may enroll in Part A at any time during your Initial Enrollment Period. The Initial Enrollment Period (IEP) for Original Medicare begins three months before the month you turn 65, includes the month in which you turn 65, and ends three months after the month of your 65th birthday.
For example, if you birthday is June 6, your IEP begins March 1 and ends September 30. Your coverage begins the first day of the month you turn 65, in this case, June 1.
If you are already collecting Social Security retirement benefits, your enrollment is Part A is automatic. You will receive your Original Medicare card in the mail about three months before your 65th birthday.
If you are not collecting Social Security retirement benefits, you need to contact the Social Security Administration to enroll.
The Part A deductible ($1,316 per benefit period in the year 2017) for hospitalizations must be met before Medicare covers any services received. Then, you are responsible to pay all co-pays during the hospital stay, which vary based on the number of days you’re admitted. Part A only covers the first 150 days with co-payments. After 150 days of hospitalization, you are responsible for 100% on the hospital costs. If you have already used your “lifetime reserve days,” you could be responsible for paying 100% of your costs even sooner!
If you are discharged and readmitted to the hospital within 60 days, you are in the same Benefit Period and the deductible does not need to be met again. However, if more than 60 days have passed since your hospital discharge and you’re admitted again, you will have to meet the deductibles and co-pays under Part A again because a new Benefit Period has begun.
In order to qualify for Medicare coverage of skilled nursing care, you must first stay 3 days admitted in the hospital. The first 20 days in a Skilled Nursing Facility are covered 100% by Medicare, while on days 21-100 you’re responsible for $164.50 per day co-payment. If your skilled nursing facility stay last longer than 100 days, you will be responsible for 100% of the cost.
The important thing to keep in mind is that Part A has no Maximum Out Of Pocket (MOOP), meaning you have unlimited financial exposure. Under Original Medicare, the sky is the limit — your out of pocket costs could grow and grow and grow!
Medicare Part B covers doctors, preventive services, and some physician-administered medications. Part B premiums range and are based on your previous taxable household adjusted gross income. Many preventive services under Part B (immunizations, well woman exam, smoking cessation programs) cost you $0!
You become eligible for Medicare Part B by “ageing in” when turning 65, or if you or your spouse have legally worked for at least 40 quarters (ten years) and have paid your Medicare taxes. Some others become eligible due to disability or certain illnesses. Once enrolled in Part B, you do not need to reapply each year.
You may enroll in Part B at any time during your Initial Enrollment Period (IEP). The IEP for Original Medicare begins three months before the month you turn 65, includes the month in which you turn 65, and ends three months after the month of your 65th birthday.
If you are already collecting Social Security, your enrollment is Part B is automatic. Otherwise, you need to contact the Social Security Administration.
Part B premiums range and are based on your previous taxable household adjusted gross income. If you are collecting Social Security retirement benefits, your Part B premium will automatically be withdrawn from your Social Security Benefits. If you are not yet collecting Social Security, the Part B premium must be paid manually every quarter (every three months) directly to the Social Security Administration.
The Part B deductible ($183 per year in 2017) must be met before services are covered. After the deductible is met, services provided by Medicare-approved providers are covered at an 80% / 20% coinsurance. This means that Medicare pays 80% of the approved amount, and the beneficiary pays 20% of the approved amount.
If a provider or a facility does not accept “Medicare assignment”, you could also be faced with higher out of pocket costs known as excess charges.
*It’s important to recognize that both Medicare Part A and Part B do not have out of pocket maximums!
In other words, you financial exposure is not limited and you could face high out of pocket costs!*
You could face 20% of medical bills, whether that’s 20% of a $100, $1000, or $100000 bill – and that’s for Part B alone! Imagine how costly a long-term hospital stay could be; remember, Part A does not provide hospitalization coverage during a stay longer than 151 days! To help keep medical costs lower, enroll in a Medicare Supplement plan.
Part D: Prescription Drug Coverage
Medicare Part D, the prescription drug coverage portion of Medicare, is administered by private insurance companies. Part D plans cover most vaccinations (those not covered by Part B). It is required you have prescription drug coverage in addition to Medicare Part A and Part B or you may have to pay a late enrollment penalty.
Part D plans vary in cost and coverage. Your monthly premium is paid directly to the insurance company and the company will provide you with a card to bring to the Pharmacy, to lower the costs of drugs.
Prescription drug coverage greatly reduces the cost of medications. Premiums, deductibles, co-pays, and the formulary (list of covered drugs) can vary greatly between plans, and may also change dramatically each year. Also, your medication needs could change at any time. Costs between Generic and Brand Name drugs can mean a cost savings of thousands per year! It is strongly recommended to audit your medication needs and your drug coverage annually – and My Medicare Partners provides you a FREE Annual Rx Checkup!
Part D plans do not have Maximum Out Of Pocket limits and costs for drugs can vary. Coverage may depend on if you have met your drug plan’s deductible, are in the initial coverage period, donut hole, or catastrophic coverage. To read more about the various levels of coverage, click here.
You are eligible to enroll in a drug plan during your Initial Enrollment Period. If that is missed, you may enroll in a Part D plan during the Annual Election Period (Oct 15th – Dec 7th of every year).
Other Medicare Options
Since basic, or Original, Medicare only covers part of medical costs, many seniors choose to enroll in a a Part C (Medicare Advantage) plan or a Medicare Supplement (MediGap) plan. In fact, over 11 million Americans were enrolled in a Medigap plan as of December 2014.
Medicare Supplement plans can greatly reduce – and often eliminate – your out of pocket costs when accessing healthcare!
Medicare Part C plans, also known as Medicare Advantage (MA) or Medicare Advantage with Prescription Drug coverage (MAPD) plans combine parts A, B, and D, so to say. Most MA plans also offer drug coverage. MAPD plans provide coverage for hospitals, doctors, and medications. However, out of pocket costs under an MA or MAPD plan can get quite high!
MA and MAPD plans vary in premiums based on the area in which you live, the network of providers, and the insurance carrier. Other costs to consider are deductibles and co-pays. Part C plans have Maximum Out Of Pockets (MOOP), or limits on the total costs to you, the beneficiary. MA and MAPD plans’ MOOP is currently $6,700. In other words, your cost for covered services will not exceed $6,700 in a calendar year.
Most MAPD plans are HMOs, meaning that Medicare Advantage plans limit you to a network of doctors, hospitals, and facilities you must visit for health care, and you must obtain referrals from your Primary Care Provider before you can see most Specialist Doctors (i.e. cardiologist, pulmonologist, etc.).
In other words, Medicare Advantage plans have many barriers to accessing your chosen providers in a timely manner.
In order to enroll in a Medicare Advantage plan, you must be enrolled in Medicare Part A and B and continue paying your monthly premiums. Enrollment may be completed during your Initial Election Period or during the Annual Election Period. The Medicare Advantage Annual Election Period, also known as Open Enrollment, takes place each year from October 15 until December 7. These plans become effective on January 1 of the following year.
Medicare Supplement, also known as MediGap, plans pay many of the deductibles and co-pays that you would otherwise have to pay out of your own pocket under Original Medicare only. Over 11 million Americans turn to Medicare Supplement plans for their health care coverage!
When you enroll in a Medicare Supplement plan you still keep Original Medicare. Your Medicare Supplement simply fills in the gaps to cover costs not covered by Original Medicare! Millions of Americans – and counting – have chosen Medicare Supplement plans for their convenience, flexibility, and to reduce out of pocket costs. Medicare Supplements cover hospitals and doctors, however a separate drug plan must be purchased.
There are many types of Medicare Supplement Plans available, and they are standardized by the Federal Government. In other words, Plan G from Company X offers the same coverage as Plan G from Company Y. However, MediGap premiums may vary between insurance companies, based on a variety of factors. It is also recommended to review a Plan’s rate increase history as well as the insurance carrier’s financial rating, or strength. My Medicare Partners will easily do all of this for you!
Deductibles, co-pays, and coinsurance for each Plan is standardized but should be taken into consideration when looking for a plan. The out of pocket costs in a Medicare Supplement plan are very low compared to Original Medicare only. In fact, some Medicare Supplement plans completely eliminate out of pocket costs! Seniors on a fixed budget may prefer Medicare Supplement plans, since costs are lower and much more predictable than under Original Medicare only.
All MediGap plans include a Maximum Out Of Pocket (MOOP) which will help greatly reduce your costs. MOOP limits vary between Plans and is an important factor to take into account.
Medicare Supplement plans allow Members to visit any Doctor or Facility that accepts Medicare (which is most of them!), anywhere in the United States. Some MediGap plans even provide coverage while traveling abroad. These plans cover the nation’s top hospitals and doctors, so you have the ultimate flexibility.
Medicare Supplements allow you to focus on enjoying life while limiting your financial risk and eliminating the medical bills many seniors encounter.
You are eligible to enroll in a MediGap plan if you have enrolled in Medicare Part A and B. Medicare Supplements do not provide medication coverage, so it is advised you also enroll in a Part D prescription drug plan to avoid penalties and to have comprehensive coverage.
When you are first eligible to enroll in a Medicare Supplement plan, it is guaranteed you will be accepted into the plan and your preexisting conditions will be covered. Only during this time are all MediGap plans “guaranteed issue.” After the Guaranteed Acceptance Period, an insurance company can deny you coverage or exclude an ailment from coverage for a period of time (there are some exceptions). Also, plan premiums tend to increase the older you are, so it’s highly recommended to enrolled in a Medicare Supplement as soon as you can!
Click here for more information on Medicare Supplement (AKA MediGap) plans. Or contact us today at 1-844-305-6169 for more information and education about your options.
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