3 Facts About Medicare
- Medicare covers U.S. citizens age 65 and older and people with certain disabilities.
- Medicare comes in 4 Parts: Parts A, B, C, and D. Medicare Parts A & B are administered by the government and are referred to as Original Medicare. Medicare Parts C & D are provided by private health insurance companies.
- Original Medicare only covers 80% of Part B services and there's no out-of-pocket limit; therefore, many people get Medicare Supplement Insurance plans to help pay for some of these out-of-pocket costs.
Medicare Part A
Medicare Part A, sometimes called Hospital Insurance, covers hospital and inpatient hospital care, skilled nursing facility, hospice, lab tests, surgery, home health care.
In 2022, the deductible for Medicare Part A hospital care is $1,556 per benefit period*.
A benefit period, as described above, begins the day that you are admitted to the hospital and ends when you've been discharged for at least 60 days. If you have been out of the hospital for more than 60 days and are admitted again, a new benefit period begins.
* Per The Centers for Medicare & Medicaid Services (CMS) fact sheet on Nov 12, 2021.
Medicare Part B
Medicare Part B is optional and covers doctor and other health care providers' services and outpatient care. Part B also covers durable medical equipment, home health care, and many preventive services. In most cases, Original Medicare only covers 80% of Part B services. In order to qualify for certain private Medicare options, such as Medicare Advantage or Medicare Supplement Insurance (also called Medigap Insurance), you must be enrolled in Part A and Part B. The standard Medicare Part B premium in 2022 is $170.10 per month, and the 2022 deductible is $233.00 per year*. The Part B premium is based on your adjusted, household gross income. Together, Parts A & B are typically referred to as Original Medicare.
* Per The Centers for Medicare & Medicaid Services (CMS) fact sheet on Nov 12, 2021.
Medicare Supplement Insurance Plans (Medigap Plans)
Medicare Supplement plans also called Medigap plans, are offered by private health insurance companies to help pay for certain out-of-pocket costs associated with Original Medicare (Parts A and B).
Medicare Part C (Medicare Advantage)
Medicare Part C, also called Medicare Advantage or MA plans, is an alternative to Original Medicare. This type of plan is offered by private insurance companies and must provide at least the same basic benefits as Medicare Parts A & B but may also contain additional features and benefits such as prescription drug coverage.
Medicare Part D (Prescription Drug Coverage)
Medicare Part D covers prescription drugs for Medicare. Plans are offered by private insurers—not the federal government—and the details will vary based on insurance providers. In addition to Original Medicare, you can enroll in Part D coverage from a private, standalone Prescription Drug Plan or through a Medicare Advantage plan that includes it.
Medicare eligibility and enrollment
In order to qualify for Medicare coverage, you must be at least 65 years old and a U.S. citizen OR a permanent legal resident who has lived in the U.S. for at least 5 continuous years. You also may qualify if you are under 65 and have a certain disability. Some beneficiaries will be enrolled in Original Medicare automatically. If not, applicants can apply during certain enrollment periods.
Contact a Golnsurewise Advisors licensed insurance agent to discuss options to manage your healthcare.
Medicare Supplement Basics
Original Medicare, Parts A and Part B, covers a lot, but it's important to note that it comes with out-of-pocket costs you may have to pay. Adding Medicare Supplement Insurance coverage, also called Medigap insurance, can help pay for out-of-pocket costs that come with Original Medicare coverage. This includes such things as coinsurance, copayments, and deductibles, giving beneficiaries peace of mind.
Medicare Supplement plans are designed to work together with Medicare Part A and Part B. It's important to note that this differs from Medicare Advantage plans, which is an alternative to Original Medicare and provided by private insurance companies with full private coverage. Medicare Supplement plans provide additional coverage to Original Medicare and help pay for out-of-pocket costs not covered by Parts A and B.
Medicare Supplement Benefits
Medicare Supplement Insurance comes in 10 plan options, but each lettered plan type must include the same standardized benefits. That is true regardless of the insurance company and/or the location. For example, a Medicare Supplement Plan G in Texas includes the same benefits as a Plan G in Virginia. Because of this, Medigap policy holders are able to see any doctor who accepts Medicare patients, even including those out of state. Medigap coverage also travels with you anywhere you go in the United States and is guaranteed renewable for life if the premiums are paid on time.
The only difference to that general rule is that if you live in Wisconsin, Minnesota or Massachusetts, your Medicare Supplement insurance plan options will be different than in other states. Medicare Supplement insurance plans can vary, but must all cover at least a portion of the following benefits:
- Medicare Part A coinsurance costs up to an additional 365 days after Medicare benefits are exhausted;
- Medicare Part A hospice care copayments or coinsurance;
- Medicare Part B copayments or coinsurance;
- First three pints of blood used in a medical procedure.
Some plans may also help cover Medicare Part A and B deductibles, along with preventive care coinsurance, foreign travel emergency care, Skilled Nursing Facility care coinsurance and Part B excess charges. Please check plan documents for full details. Note that Medicare Supplement Plans C and F are not available to beneficiaries who became eligible on or after Jan. 1, 2020.
Medicare Supplement Costs
Community no-age-rated: These Medicare Supplement plans charge premiums that are the same across the board, regardless of what your age is.
Issue-age-rated: These are plans that base their premiums on your age when you first enroll in the policy. Therefore, the younger you are when you enroll in this type of plan, the lower your premium will generally be.
Attained-age-rated: Like issue-age-rated, these plans base their premiums on the age you were when you first bought a policy, but, unlike issue-age-rated, the premiums with these plans increase as you get older.
It's important to note that no matter what method an insurance company uses to price plans, premiums may increase over time for other reasons, such as inflation.
Medicare Supplement Eligibility & Enrollment
In order to be eligible to enroll in a Medicare Supplement plan, you must first be enrolled in both Medicare Part A and Part B. Remember, the purpose of Medigap (Medicare Supplement) is to help pay for out-of-pocket costs associated with Original Medicare. Your Medigap Open Enrollment Period (OEP) begins on the first day of the month that you are both age 65 or older and enrolled in Part B, and lasts for six months from that date. So for example, if you turn 65 in June but don't start Medicare B until mid-October, your Medigap Open Enrollment Period will begin on November 1 and end May
Medicare Advantage Basics
Medicare Advantage, also called Part C, is a Medicare health plan offered by private insurance companies. These plans are considered an alternative to Medicare and cover all the same services covered by Original Medicare. These plans may also offer additional benefits that Original Medicare doesn't offer.
Medicare Advantage is considered an all-in-one health care solution, meaning it replaces Original Medicare, and does not need to be supplemented with anything. In fact, you cannot have a Medicare Advantage plan and a Medicare Supplement plan at the same time.
There are many benefits to Medicare Advantage. It may offer the convenience of having all of your health and drug benefits under a single plan, instead of enrolling in a separate, stand-alone Medicare Prescription Drug Plan (for Medicare Part D coverage). Some Medicare Advantage plans also offer extra benefits that Original Medicare doesn't cover, such as routine vision and dental coverage.
What is a Medicare Advantage plan?
Medicare Advantage plans are full-replacement alternatives to Original Medicare, Parts A and B. Instead of having Medicare benefits administered through the federal program, beneficiaries can instead opt to get their coverage through a Medicare Advantage plan. These plans are administered through private insurance companies that contract with Medicare.
All Medicare Advantage plans are legally bound to provide at least the same level of coverage as Original Medicare, Part A and Part B. (The one exception to this is for hospice care, which Part A still covers.) The benefits are not just limited to that, however—some plans may also contain additional benefit coverage, such as prescription drugs, routine vision and dental, hearing, or health wellness programs.
If you would like to take advantage of prescription drug benefits, known as Medicare Part D, you may not need to enroll in a separate Medicare Prescription Drug Plan. Rather, this is a benefit commonly available through a Medicare Advantage Prescription Drug plan. It's worth noting that not every Medicare Advantage plan includes prescription drug coverage, so be sure to double-check with the plan details.
Common Medicare Advantage Plan Types
Medicare Advantage comes in a variety of plan options. It's best to compare the different Medicare Advantage plan options for your state. Some of the most common options available in many locations include:
Preferred Provider Organization (PPO) plans: this is a type of Medicare Advantage Plan offered by a private insurance company. PPO Plans include network doctors, health care providers, and hospitals. In most cases, you do not need a referral to see a specialist. You will usually pay less if you use doctors, hospitals, and other health care providers that belong to the plan's Network than those outside of Network.
Health Maintenance Organization (HMO) plans: this is a type of Medicare Advantage Plan that normally requires you to seek health care coverage from doctors, specialists, or hospitals in the plan's network, except in an emergency or urgent care situation.premium will generally be.
Special Needs Plans (SNPs): this is a type of Medicare Advantage Plan, just like the HMO or PPO plans above. Medicare SNPs typically limit membership to people with specific diseases or characteristics. Medicare SNPs tailor their benefits, provider choices, and drug formularies to best accommodate the specific needs of the groups they serve.
Medicare Medical Savings Account (MSA) plan: A Medicare Medical Savings Account (MSA) plan is a plan that combines a high-deductible health plan with a medical savings account.
Private Fee-for-Service (PFFS) plans: this is a type of plan offered by a private insurance company. PFFS plans aren't the same as Original Medicare or Medigap. The plan determines how much it will pay doctors, other health care providers, and hospitals, and how much you must pay when you get care.
Prescription Drug Plan
Prescription Drug Plan Basics
Medicare Parts A & B (Original Medicare) does not cover the cost of outpatient prescription drugs. To help fill this void, Medicare Part D, also known as Prescription Drug Plans, was created on January 1, 2006. The program is designed to help Medicare beneficiaries pay for the cost of outpatient prescription drugs.
What Part D covers
Medicare Part D is made up of many different kinds of drug plans that are provided by private companies. Each of these various plans covers its own list of drugs which is also called a formulary. The cost of a particular drug plan depends on whether or not you use a pharmacy in your plan's network, and which types of drugs are included in the plan.
How to Enroll
There are two primary ways you can receive prescription drug coverage—with Original Medicare and Medicare Part D or a Medicare Advantage plan that includes prescription drug coverage. Because those are the only two options, it is generally not possible to be enrolled in a Prescription Drug Plan and a Medicare Advantage plan simultaneously. It's important to note that prescription drug coverage is not mandatory; however, you may be assessed a penalty if you wait 63 or more days after your Initial Enrollment Period ends.
When to Enroll
There are specific times that you are able to enroll in a Prescription Drug Plan:
Initial Enrollment Period for Part D: This begins three months before you turn 65 and ends four months after you turn 65—for a total of seven months. If you are eligible for Medicare through disability, this Initial Enrollment Period starts three months before your 25th month of disability benefits from Social Security or the Railroad Retirement Board and also lasts for a period of seven months.
Annual Election Period: Each year this runs from October 15th to December 7th. During this time, you can enroll in a plan for the first time, switch Medicare plans, or dis-enroll from a current plan that you may have.
Special Election Period: There are some circumstances that allow for enrollment outside the standard enrollment periods—examples of this would be moving outside your current plan's service area, moving into a nursing home, or losing Medicaid eligibility.
While it is possible to enroll in Medicare Part D even outside of the timeframes above, you will likely have to pay a late-enrollment penalty if you went without creditable coverage for too long, so it's important to plan ahead.