Medicare can often seem like an overwhelming and difficult to understand system of healthcare. For example, Medicare has many different parts and costs – Part A, Part B, Part C, Part D, late enrollment penalties, varying premiums, co-pays, coinsurance, deductibles, etc. ... There are many different pieces to the puzzle that need to go together correctly in order for it all to make sense.
On this page, we have lots of good information about what all those pieces mean. However, if you're still confused, please don't hesitate to give us a call or schedule an appointment with us. Our Medicare consultations are free of charge.
For the most part, Original Medicare is available for people age 65+ as well as people with certain disabilities (who are any age) and people with permanent kidney failure requiring dialysis or transplant.
You can get Part A at age 65 without having to pay premiums if: you are a US citizen (or a permanent legal resident) that has lived within the United States for the last five years; you are eligible to receive Railroad Benefits or Social Security, but you have not yet filed for them; you or your spouse had Medicare-covered government employment.
Most people do not have to pay a premium for Part A of Medicare if they are eligible. Part B however does have a premium based on your previous years adjusted gross income. The current base Part B premium is 148.50 per month which can be deducted from Social Security before you receive or if you have not claimed your SSI, Medicare will send you a quarterly bill for the Part B premium.
As mentioned before, Original Medicare is what everyone receives when either they turn 65, are on Social Security Disability for 2 years, or have End Stage Renal Disease. There are 2 main parts to Original Medicare: Part A (Hospital Coverage) and Part B (Medical Coverage). Read about the differences below.
Medicare Part A
Medicare Part A accounts for half of your Medicare coverage and provides coverage for medical expenses from inpatient care. Essentially, Medicare Part A is your Hospital Insurance from "Original Medicare," and it is accepted at the majority of hospitals, nursing homes, and nursing facilities across the country. It helps cover the cost of doctor visits and medical services including inpatient care in a hospital, skilled nursing facility care, nursing home care (in a skilled nursing facility that’s not custodial or long-term care), hospice care, and home health care.
Part A has its own deductibles and co-pays, and generally covers 80% of hospital services. Do keep in mind that even though Medicare Part A Covers 80%, you are still expected to pay the 20%. Medicare does not cap what it expects you to pay, either. For example, if you have a heart attack and the hospital charges Medicare 150,000 for your surgery, you could be billed 30K.
Medicare Part B
Medicare Part B is the other half of "Original Medicare" and covers medically necessary services and preventative services. It also covers things like clinical research, ambulance services, and mental health (both inpatient and outpatient). Combined together, Medicare Part A and Part B create decent healthcare coverage, but they do not cover everything. Long-term care (also called custodial care), most dental care, most eye exams, dentures, hearing aids, and some foot care services are not covered.
As with Medicare Part A, Part B covers 80% of covered medical services. It also has its own deductibles, co-pays, and coverage limitations. As a reminder, when you are only covered by Original Medicare, you do not have a cap on the 20% you owe for your covered services. Maybe you have to pay 2K, but maybe you have to pay 200K.
Medicare Part D
Wait, what happened to Part C?
We will get there in a minute!
Medicare Part D is the part of Medicare that covers prescription drugs. Even if you don’t currently take any prescription drugs, you should definitely consider getting Medicare Part D. Though it is optional, if you decide that you don't want to opt in during your initial enrollment period, you’ll most likely pay a late enrollment penalty if you join a plan later. This is not always the case, but it is in most instances. On the other hand, if you currently take prescription drugs, Part D can help you with costs over the long-term.
As with the other parts of Medicare, Part D has 4 different phases of coverage that determine how much you will pay for your medications throughout the year. If you take medications for breathing, diabetes, glaucoma, arthritis, or any other chronic condition you should definitely have someone who is experienced in offering thorough drug plan reviews or you could end up wasting thousands of dollars in unnecessary co-pays.
This part of Medicare, in our opinion, can be the trickiest. You definitely want to talk to a professional about it.
What about the 20% that Medicare doesn’t cover?
As mentioned before, Original Medicare covers approximately 80% of the bill, but you are expected to cover the 20% with no maximum out of pocket. There are two options available to cover this 20%: Medicare Advantage (Part C) or Medicare Supplement.
Medicare Part C
Medicare Part C, often called a Medicare Advantage Plan, is another way to get your Medicare Part A and Part B coverage. One of the biggest differences between "Original Medicare" and Medicare Part C is that there is coverage for some dental, vision, hearing, and prescription drugs. (Original Medicare does not cover these things.)
Additionally, there are copays and an out-of-pocket maximum each year rather than the coinsurance with "Original Medicare" where you pay 20% of the cost of the services rendered. The most common types of Medicare Advantage Plans are Health Maintenance Organization (HMO) Plans, Preferred Provider Organization (PPO) Plans, Private Fee-for-Service (PFFS) Plans, and Special Needs Plans (SNPs).
Medicare Supplement, also called Medigap, helps fill "gaps" in Original Medicare, and it is sold by private companies. While Part C replaces Part A and Part B, Medigap is a plan that is in addition to Part A and Part B. It helps you pay for that 20% you are responsible for covering with out-of-pocket costs. It is sold by private companies, and you would opt into their specific insurance programs in addition to your Original Medicare.
Enrolling in Medicare can be difficult if you don't talk to a licensed Medicare professional. There are so many little details that often get left out or forgotten when people do it themselves. The great thing is that there are many people out there who are willing to help (like us!) and will make sure that you are in the right plan for your health situation. Medicare advice is free of charge, and no Medicare professional will ever charge you for your consultation. Enrollment generally begins a few months before your 65th birthday and continues a few months after. You can also change your coverage during open enrollment toward the end of the calendar year. We suggest that all of our clients have a review of Medicare coverage every few years or if they have a health change.