Medicare 101
- Original Medicare is federally regulated health-care insurance for adults age 65 and over.
- Only for US Citizens or legal permanent resident of at least 5 continuous years
- Qualify for Medicare under the age of 65 if you have qualifying conditions or disabilities.
Medicare is federally administered health insurance for those at least 65 years old or younger with qualifying conditions. Medicare is designed to help provide health care at reduced costs for aging populations. It is broken down into several parts and you can also supplement Medicare with a supplemental plan (Medigap). Different parts of Medicare cover different types of health care, let’s take a look.
The Parts of Medicare Explained
Original Medicare is broken up into parts that cover different aspects of health care costs.
Medicare Part A – Hospital Insurance
Part A covers inpatient hospital visits and stays, skilled nursing facility care, hospice care, and some home health care costs (like visiting nurses). If you have to go to the emergency room, Part A covers some or all of the costs.
Medicare Part B – Medical Insurance
Part B covers some doctor visits, medical supplies, outpatient care, and preventative services. When you go to the doctor for a checkup, Part B covers some or all of the costs.
Medicare Part D – Prescription Drug Coverage
Part D covers the costs of prescription drugs, refills, and many doctor recommended vaccines (like flu). When you need a prescription, Part D covers some or all of the costs.
How does Medicare Work?
You have two options to choose from on how you get Medicare coverage. After you enroll in Medicare, you’ll have to decide how you want to receive your Medicare benefits. Here are the two main ways:
Original Medicare
This includes Part A (Hospitals) and Part B (Medical) coverage, and you pay for services as you use them. When you use a service, you pay a deductible at the start of the year which is usually about 20% of your Medicare-approved service costs (aka. Coinsurance). You can choose to add a separate Part D drug plan if you like which will increase the costs some.
Original Medicare pays for most, but not all, of the medical care and supplies you need. A Medigap (Supplemental Medicare Insurance) plan can help pay for those other costs like coinsurance, deductibles, and copays. Certain Medigap supplemental plans will also cover items not covered by original Medicare, for example, travel health insurance coverage.
Medicare Advantage
This is a “one-stop-shop” alternative to Original Medicare coverage. Medicare Advantage offers plans which bundle Part A, B, and usually D together. They offer additional benefits that Original Medicare does not such as hearing, dental, vision, and more. With Medicare Advantage you pay yearly contracts to Medicare and must follow the Medicare coverage rules. Medicare is required to notify you of any changes to your plan prior to the enrollment or re-enrollment period which begins each year October 15th.
What Will I Pay for Original Medicare?
Costs can vary from person to person based on the type of health-care services you use, where you live, and how frequently you need them. Typically, some costs will include:
- Medicare Part A & B Deductibles
- Monthly Premium for Part A (unless you’ve worked 10+ years in Medicare-covered employment)
- Monthly Premium for Part B
- Copayments/Coinsurance Costs
Original Medicare does not have a spending limit on out-of-pocket annual costs. This means that no matter how expensive your health care costs are for the year; you could pay quite a bit out of pocket. The higher your costs the more you’ll pay out of pocket with Original Medicare.
Can I Get Help with Medicare Costs?
As we saw above, you can still be required to pay out-of-pocket for some aspects of medical care even when on Original Medicare insurance. If you need help with other medical expenses many beneficiaries purchase Medigap (Medicare Supplemental) insurance to help with these costs. Medigap plans work in conjunction with Original Medicare and can help supplement costs of copays, deductibles, and co-insurance.
If you’re on a fixed or limited income, you may qualify for a Medicare Savings Program. This helps with out-of-pocket Original Medicare expenses like copays, deductibles, and co-insurance. There are 4 different programs available offering different levels of financial assistance based on your income eligibility. Medicare Savings Programs are run through state Medicare programs, so contact your states Medicaid department to find out if you qualify.
The Extra Help program (aka the Low-Income Subsidy) may help those enrolled in Medicare Part D pay out-of-pocket prescription drug costs like copays, deductibles, and co-insurance. This is also run through local state Medicaid programs and works with Original Medicare.
Contact your local Medicaid program for more information of qualifying.
Open Enrollment 2020 – October 15th through December 7th
It is open enrollment for Medicare from 10/15 through 12/07, head over to https://www.medicare.gov/ to learn more.
CLICK HERE TO FIND A MEDICARE PLAN
Find a Medicare Supplemental Plan
There are all kinds of benefits to a Medicare Supplemental Insurance plan, but it will depend on where you life as not all locations have the same options to choose from. Find out of you qualify for a Medigap supplemental Medicare plan in seconds:
