Let’s face it. Medicare is a giant program and as such, understanding it can be difficult for any senior who might be trying to figure out what healthcare services are covered.
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Like any government-sponsored program that is full of rules and regulations with instructions that appear to be written by attornies, Medicare can be a little bit scary when you first visit the Medicare.gov website.
Over the years, the Medicare Solutions Team has kept track of the most frequently asked questions that seniors or disabled individuals have shared with us. Hopefully, this series of FAQs that are being written for non-insurance-speaking people will help you understand what Medicare will and, more importantly, will not do for you.
What is Medicare Part A?
- What does Part A cover? Medicare Part A covers inpatient hospital stays, patient care in a skilled nursing facility, patient hospice care, and some home health care. Part A coverage is available if you or your spouse paid Medicare taxes for a certain amount of time while working.
- What is the monthly premium? For most individuals, Medicare Part A is free. However, if you do not qualify for premium-free Part A, your monthly premium can be $274 or $499 per month.
- Do you have to sign up for Part A? When an individual applies for retirement or disability from Social Security or the RRB (Railroad Retirement Board) this application also serves as an application for Medicare. When approval for retirement benefits is finalized, you’ll automatically receive premium-free Part A coverage.
- What are the deductibles and coinsurance for Part A? For 2023, there is a $1,600 deductible per benefit period. If you are admitted to a hospital there is no coinsurance for the first 60 days. From day 61-90, you are responsible for $400 coinsurance per day. From 91 days and beyond, your per-day coinsurance cost is $800.
What is Medicare Part B?
- What does Part B Cover? Medicare Part B offers two main types of services: medically necessary and preventative. Medically necessary services include outpatient care, durable medical equipment, and doctor visits. Preventative services include lab work, screenings, and vaccinations.
- What is the Part B monthly premium? The standard Medicare Part B monthly premium for 2023 is $164.90 for most people. However high-income individuals will be charged more depending on their level of income.
- Do you have to sign up for Part B or is it automatic? Unlike Medicare Part A, you will need to sign up for Medicare Part B. Moreover, if you fail to sign up for Part B within 90 days of being enrolled in Part A, you’ll likely be charged a late penalty when you do enroll.
- What are the deductibles and coinsurance for Part B? The Part B deductible is $233 for 2023. After you’ve met the deductible, you’ll typically pay 20% of the Medicare-Approved Amount for most doctor services (including most doctor services if you’re in the hospital), outpatient therapy, and durable medical equipment.
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What is Medicare Part C?
- What does Medicare Part C cover? Part C, commonly referred to as Medicare Advantage, covers everything Medicare Part A and B covers (and sometimes Part D) but is offered by and administered through private insurance companies. Medicare Advantage plans (Part C) also offer additional benefits like prescription drug coverage (Part D), dental coverage, and vision and hearing coverage.
- What is the Part C monthly premium? Medicare Advantage premiums (Part C) depend on the type of plan you select (most companies have several to choose from) and where you live. When you enroll in a Medicare Advantage plan you will be responsible for the premium to the insurance company (if any) and your Medicare Part B monthly premium. Depending on your zip code, you might qualify for a zero Medicare Advantage premium and in some cases, a partial refund on your Medicare Part B premium.
- Do you have to sign up for Medicare Part C? Yes. Since Medicare Part C (Medicare Advantage) is administered by private insurance companies, you must contact them or a broker that represents them to enroll in a Part C plan.
What is Medicare Part D?
- What does Medicare Part D cover? Medicare Part D covers prescription drugs that are self-administered outside of a medical facility or doctor’s office. These are the drugs that you purchase at the drug store or compounding pharmacy.
- What is the Part D monthly premium? Your Medicare Part D premium will vary depending on which insurance company you purchase your plan through. The maximum annual deductible allowed is $505 for 2023 however, many companies will assign a deductible that is less than the maximum. After you’ve met your annual deductible, you will then pay 25% of covered costs up to the initial coverage limit. Some plans may offer a $0 deductible for lower-cost (Tier 1 and Tier 2) drugs. Additionally, Part D premiums can be impacted if your income is above a certain threshold by the IRMAA rule.
- What are the 4 phases of Medicare Part D? The coverage phases of Medicare Part D (prescription drug coverage) can be somewhat confusing and might occasionally cause “sticker shock” at the pharmacy check-out counter.
- Deductible Phase – In this phase you will be charged against your deductible plus your share of the prescription cost when your deductible has been met.
- Initial Coverage Phase – You will pay a copay dollar amount or coinsurance percentage based on the tier your drug is assigned.
- Coverage Gap or Donut Hole Phase – When your out-of-pocket copays combined with what your plan has paid for your prescription drugs reach $4,660, you enter the coverage gap (donut hole) where your cost for prescriptions may go up. If you enter the coverage gap (not everyone does), you will pay 25% of the retail price of the prescription. This may become unaffordable for seniors who are taking very expensive drugs.
- Catastrophic Phase – If or when your prescription drug out-of-pocket costs reach $7,400 while in the coverage gap, you will enter the Catastrophic Stage. If or when this happens you will begin paying the following: 5% of the retail price or $4.15 for generic drugs or $10.35 for all others.
Are You Automatically Enrolled in Medicare at age 65?
Yes, but not everyone. You will automatically be enrolled in Medicare Part A and Part B at age 65 if you get benefit checks from Social Security or Railroad Retirement Board. According to the SSA, more than 30% of seniors claim Social Security benefits early before their full retirement age.
If this is not the case for you, you will need to contact SSA (Social Security Administration) either online or by telephone to manually enroll in Medicare Part A and B.
Should I Consider a Medicare Supplement Plan?
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Many seniors who are dealing with severe or multiple health issues and prefer not to pay substantial out-of-pocket healthcare expenses should consider a Medicare Supplement plan.
When you are enrolled in Original Medicare and have a Medicare Supplement plan, you can significantly reduce your out-of-pocket healthcare expenses. Medicare Supplement plans (Medigap) were designed to pick up the deductibles, coinsurance, and copays found in Original Medicare.
Since there are currently 10 standardized Medicare Supplement plans to choose from, we recommend that you contact a health insurance broker that represents many of the highly-rated insurance companies. Insurance brokers like The Medicare Solutions Team are Medicare specialists who can help you find a plan that will fit your circumstances and budget.
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