Medicare is the federal health insurance program for people who are 65 or older.
Additionally, it covers certain younger people with disabilities and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD). The different parts of Medicare help cover specific services: There are a hdanful of Medicare Plans to choose from, such as;
Medicare Plan Part A (Hospital Insurance)
- Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
- Cost: Part A monthly premium – Most people don’t pay a monthly premium for Part A, but if you buy Part A, you’ll pay up to $441 each month.
Part A hospital inpatient deductible, you pay:
- Days 1-60: $1,184 for each benefit period.
- Days 61-90: $296 coinsurance per day of each benefit period.
- Days 91 and beyond: $592 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
- Beyond lifetime reserve days: all costs.
Medicare Plan Part B (Medical Insurance)
- Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.
- Cost: Part B monthly premium – most people pay $104.90 per month. Your Part B deductible is $147 per year.
Medicare Plan Part C (Medicare Advantage Plans)
- A Medicare Advantage Plan is a type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits.
- Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you’re enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan and aren’t paid for under Original Medicare. Most Medicare Advantage Plans offer prescription drug coverage.
- Cost: Part C monthly premiums vary by plan.
Medicare Plan Part D (Prescription Drug Coverage)
- Part D adds prescription drug coverage to Original Medicare, some Medicare Cost Plans, some Medicare Private-Fee-for-Service Plans, and Medicare Medical Savings Account Plans. These plans are offered by insurance companies and others approved by Medicare. Medicare Advantage Plans may also offer prescription drug coverage that follows the same rules as Medicare Prescription Drug Plans.
- Cost: Part D monthly premiums vary by plan (higher-income consumers may pay more). Your estimated prescription drug plan monthly premium is based on your income as reported on your IRS tax return from 2 years ago. If your income is above a certain limit, you’ll pay an income-related monthly adjustment amount in addition to your plan premium.
5 General Rules for How Medicare Works:
- In most cases, you can go to any doctor, other health care provider, hospital, or other facility that’s enrolled in Medicare and is accepting new Medicare patients.
- With a few exceptions, most prescriptions aren’t covered in Original Medicare. You can add drug coverage by joining a Medicare Prescription Drug Plan (Part D).
- With original Medicare you don’t need to choose a primary care doctor, and you don’t need a referral to see a specialist, but the specialist must be enrolled in Medicare. You may already have employer or union coverage that may pay costs that original Medicare doesn’t. If not, you may want to buy a Medicare Supplement Insurance (Medigap) policy.
What’s Medicare supplement (Medigap) insurance?
- Medicare supplement (Medigap) insurance policies are offered old by private companies, and can help pay some of the health care costs that original Medicare doesn’t cover, like copayments, coinsurance, and deductibles.
- In addition, some Medigap policies also offer coverage for services that original Medicare doesn’t cover, like medical care when you travel outside the U.S. If you have original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share.
- A Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your original Medicare benefits.
9 Things About Medigap Policies You Should Know
- You must have Medicare Part A and Part B.
- If you have a Medicare Advantage Plan, you can apply for a Medigap policy, but make sure you can leave the Medicare Advantage Plan before your Medigap policy begins.
- You pay the private insurance company a monthly premium for your Medigap policy in addition to the monthly Part B premium that you pay to Medicare.
- A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you’ll each have to buy separate policies.
- You can buy a Medigap policy from any insurance company that’s licensed in your state to sell one.
- Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can’t cancel your Medigap policy as long as you pay the premium.
- Some Medigap policies sold in the past cover prescription drugs, but Medigap policies sold after January 1, 2006 aren’t allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
- It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Medical Savings Account (MSA) Plan.
- Medigap policies don’t cover everything. Medigap policies generally don’t cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.
Insurance Plans that Aren’t Medigap Plans…
Some types of insurance aren’t Medigap plans, they include:
Medicare Advantage Plans (like an HMO, PPO, or Private Fee-for-Service Plan)
A Medicare Advantage Plan is a type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits. Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you’re enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan and aren’t paid for under Original Medicare. Most Medicare Advantage Plans offer prescription drug coverage.
Medicare Medical Savings Account (MSA) Plans
- Medicare works with private insurance companies to offer you ways to get your health care coverage. These companies can choose to offer a consumer-directed Medicare Advantage Plan, called a Medicare MSA Plan. These plans are similar to Health Savings Account Plans available outside of Medicare. They offer flexibility in choosing your health care services and providers.
- In addition to the Medicare services that all Medicare Advantage Plans must cover, some plans may cover extra benefits for an extra cost, like dental, vision, or long-term care not covered by Medicare. Contact plans in your area for more information on what extra benefits they cover, if any.
- Medicare MSA Plans don’t cover Medicare Part D prescription drugs. If you join a Medicare MSA Plan and need drug coverage, you’ll have to join a Medicare Prescription Drug Plan.
Medicare Prescription Drug Plans
- Employer or union plans, including Federal Employees Health Benefits Program (FEHBP)
- Veteran’s Benefits
- Long-term Care Insurance Policies
- Indian Health Service, Tribal, and Urban Indian Health plans
About Dropping your Entire Medigap Policy (not just the drug coverage)
If you decide to drop the entire Medigap policy, you need to be careful about the timing. For example, you may want a completely different Medigap policy (not just your old Medigap policy without the prescription drug coverage), or you might decide to switch to a Medicare Advantage Plan that offers prescription drug coverage. If you drop your entire Medigap policy and the drug coverage wasn’t creditable or you go more than 63 days before your new Medicare coverage begins, you have to pay a late enrollment penalty for your Medicare Prescription Drug Plan, if you choose to join one.
How Medicare works with Other Insurance
The “primary payer” pays what it owes first, and then sends the rest to the “secondary payer” to pay. In some cases, there may also be a third payer.
What it means to pay primary/secondary
The insurance that pays first (primary payer) pays up to the limits of its coverage. The one that pays second (secondary payer) only pays if there are costs the primary insurer didn’t cover, but the secondary payer (which may be Medicare) may not pay all the uncovered costs.
If your employer insurance is the secondary payer, you may need to enroll in Medicare Part B before your insurance will pay.
Paying “first” means paying the whole bill up to the limits of the coverage. It doesn’t always mean the primary payer pays first in time. If the insurance company doesn’t pay the claim promptly (usually within 120 days), your doctor or other provider may bill Medicare. Medicare may make a conditional payment to pay the bill, and then later recover any payments the primary payer should’ve made.
8 Things to Consider when Choosing or Changing Your Coverage
- Does the plan cover the services you need?
- If you have other types of health or prescription drug coverage, make sure you understand how that coverage works with Medicare. If you have employment-related coverage, or get your health care from an Indian Health or Tribal Health Program, talk to your benefits administrator or insurer before making any changes.
- How much are your premiums, deductibles, and other costs? How much do you pay for services like hospital stays or doctor visits? Is there a yearly limit on what you could pay out-of-pocket for medical services? Make sure you understand any coverage rules that may affect your costs.
- Doctor and hospital choice: Do your doctors accept the coverage? Are the doctors you want to see accepting new patients? Do you have to choose your hospital and health care providers from a network? Do you need to get referrals?
- Do you need to join a Medicare Prescription Drug Plan? Do you already have creditable prescription drug coverage? Will you pay a penalty if you join a drug plan later? What’s the plan’s overall star rating? What will your prescription drugs cost under each plan? Are your drugs covered under the plan’s formulary? Are there any coverage rules that apply to your prescriptions? Are you eligible for a free Medication Therapy Management (MTM) program?
- Are you satisfied with your medical care? The quality of care and services given by plans and other health care providers can vary. How have Medicare and other people with Medicare rated your health and drug plan’s care and services? Get help comparing plans and providers.
- Where are the doctor’s offices? What are their hours? Which pharmacies can you use? Can you get your prescriptions by mail? Do the doctors use electronic health records (EHRs) or E-prescribe? Can you get an electronic copy of your information by email or to store in a personal health record? Which pharmacies can you use? Is the pharmacy you use in the plan’s network? If it’s in the network and your plan has preferred pharmacies, is your pharmacy preferred? You may pay more at non-preferred pharmacies. Can you get your prescriptions by mail?
Will the plan cover you if you travel to another state or outside the US?