Original Medicare
The federal government offers Medicare as a health insurance program to eligible individuals. This program provides coverage for a range of healthcare services and treatments. Medicare is designed to assist seniors and those with certain disabilities in accessing affordable healthcare services.
Medicare Explained
Medicare is a federal health insurance program that provides coverage for eligible individuals who are 65 or older, individuals with disabilities, and those suffering from End-Stage Renal Disease or ALS. The program is comprised of four parts that cover different types of medical services and treatments.
Part A
Part A of Medicare covers inpatient hospital stays, hospice care, and home health care. This part of the program is designed to provide medical care when individuals need it the most, especially during a hospital stay. It also covers hospice care for terminally ill individuals and home health care. However, it does not include long-term care services such as help with daily activities like bathing or clothing.
Part B
Part B of Medicare covers doctor visits, preventive care, and outpatient services. This part of the program allows individuals to receive care from their healthcare providers, covering preventive care services such as annual check-ups and screenings, as well as outpatient services like diagnostic tests and surgeries. Part B also covers mental health outpatient services and durable medical equipment such as walkers and wheelchairs.
Part C
Part C of Medicare, also known as Medicare Advantage plans, is offered by private insurance companies and provides an alternative to Original Medicare. These plans often include additional benefits such as vision and dental coverage. Medicare Advantage plans allow individuals to receive their Medicare benefits through a private insurance company, but they must first enroll in Original Medicare and continue paying for Part B premium. Some of the MA plan types available are High Maintenance Organization, Preferred Provider Organization, Special Needs Plans, Medical Savings Account Plans, Point Of Service Plans, and Private Fee For Service Plans.
Part D
Part D of Medicare covers prescription drugs and is administered by private insurance companies approved by Medicare. Participants pay a monthly premium and may face a deductible, co-payments, or coinsurance for their medications. Part D plans must offer coverage for a standard set of medications, but the specific drugs covered may vary between plans. Some drugs may also have coverage restrictions such as prior authorization or step therapy requirements.
Medicare Supplements
Medicare Supplements, also known as Medigap policies, are different from regular health insurance plans. They don’t provide health coverage but cover out-of-pocket costs that individuals are responsible for under Original Medicare, such as deductibles, coinsurance, hospital costs, and skilled nursing facility costs. With a Medicare Supplement plan, individuals pay a monthly premium and the plan covers most of their expenses. Original Medicare only covers 80% of services, so Medigap policies are designed to help beneficiaries cover the remaining 20% they are usually responsible for. There are ten standardized plans available, lettered from A to N.
Medicare Eligibility And Enrollment
Eligibility for Medicare is based on a few different factors. In general, to be eligible for Medicare, you must be 65 years of age or older, have a permanent disability, or have End-Stage Renal Disease. Additionally, you must be a legal resident of the United States and have lived in the country for at least five consecutive years.
Enrolling in Medicare can be a complex process with many options and deadlines to consider. Your Initial Enrollment Period (IEP) is the optimal time to enroll, and it begins three months before your 65th birthday, includes your birthday month, and ends three months after. During this time, you can enroll in Original Medicare (Parts A and B) or a Medicare Advantage plan (Part C).
If you miss your IEP, you may still be able to enroll during a Special Enrollment Period (SEP) or the General Enrollment Period (GEP). SEPs are available to individuals who lose job-based insurance or are entitled due to exceptional circumstances like natural disasters, misinformation, release from incarceration, and more. The GEP runs from January 1st to March 31st each year, and if you enroll during this period, your coverage will begin on July 1st. However, individuals who enroll during the GEP may have to pay a Part B premium penalty.
It’s important to note that delaying enrollment in Medicare may result in higher premiums and penalties later on. Therefore, it’s important to understand your options and enroll in Medicare during your IEP or a SEP if possible.
Medicare Costs
It is essential for all Medicare beneficiaries to be aware of the expenses related to their coverage. The standard monthly premium for Part B medical insurance amounts to $164.90 and is automatically deducted from Social Security benefits or invoiced if benefits are not received. However, higher-income beneficiaries pay a higher premium for Part B and Part D through Income-Related Monthly Adjustment Amount (IRMAA), with costs ranging from $65.90 to $395.60 for Part B and $12.20 to $76.40 for Part D. The standard deductible for Part D is $505, with a base beneficiary premium of $32.74. The Coverage Gap, known as the “donut hole,” commences once the total drug costs reach $4,660. In Catastrophic Coverage, cost-sharing for generic drugs is $4.15 and for other drugs, it is $10.35.
In the year 2023, the Part A deductible for hospitalization will be $1,600, while the Part B deductible will be $226. Medicare Advantage’s maximum out-of-pocket limit will be $8,300 for in-network services, and $12,450 for both in and out-of-network services, with a maximum deductible of $15,750 for Medical Savings Account (MSA) plans.
Overall, Medicare is a crucial program that provides essential medical care to eligible individuals. Whether you are a first-time enrollee or looking to update your coverage, it is crucial to understand the program’s different parts and benefits. By selecting the right coverage, you can ensure that you receive the necessary medical care when needed and protect yourself against the high cost of healthcare.