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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 “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, what Parts A and B cover is a portion of your costs. By only enrolling in Original Medicare, 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 Parts A, B and a Medicare prescription drug plan or have another form of “creditable” coverage; if you don’t have all three parts, you could face late enrollment penalties when you enroll at a later time.
Having “Original Medicare” only may still leave you exposed to huge financial risk. High deductibles, co-pays, and coinsurance can leave you with significant bills that you are responsible for. Enrolling in a Medicare Supplement or Medicare Advantage plan can greatly reduce financial risk, but depending on the plan you choose, it can limit your provider options. For more information about Medicare Supplement (also known as MediGap) plans, click here. Or for more info about medications, click here for more on Part D coverage.
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 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.
If you are already collecting Social Security, your enrollment is Part A is automatic. Otherwise, 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, 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.
In order to qualify for Medicare to pay for skilled nursing care you must first stay 3 days 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 medications. Part B premiums range and are based on your previous taxable household adjusted gross income. If you are collecting Social Security, your Part B premium will automatically be withdrawn from your Social Security Benefits. If you are not yet collecting Social Security, this must be paid manually every quarter (every three months) to the Social Security Administration.
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 Election Period. If you are already collecting Social Security, your enrollment is Part B is automatic. Otherwise, you need to contact the Social Security Administration to enroll.
The Part B deductible ($183 per year) 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.
*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. 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
Part D, the prescription drug coverage part of Medicare, is administered by private insurance companies. Part D plans also cover most vaccinations (those not covered by Part B). It is required to have prescription drug coverage in addition to Medicare Part A and Part B or you may have to pay a late enrollment penalty. Plans vary in cost and coverage. Your 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. This 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).
For more information about medication costs and Part D prescription drug plans, click here.
Other Medicare Options
Since basic 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 Part C plans, also known as Medicare Advantage (MA) or Medicare Advantage with Prescription Drug (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.
MA and MAPD plans vary in premiums based on the area, 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 limit 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.
Many MAPD plans are HMOs, meaning that you are limited 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 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.
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 trends of rate increases in a Plan, My Medicare Partners will easily do 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. 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 who 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 of huge 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 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 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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