Medicare 101 – The Basics
What is Medicare: Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD). Medicare is divided into four parts A, B, C & D.
Who is eligible?
You are eligible for Medicare if:
- You are 65 or older
- You are under 65 and have certain disabilities
- You have End-Stage Renal Disease, which is permanent kidney failure that requires dialysis or a kidney transplant
What does Medicare cost?
Part A is free and Part B can be too if you qualify. In most cases, you’ll automatically get Part A and Part B starting the first day of the month you turn 65 if you are already getting Social Security benefits.
If you don’t get Social Security benefits and you are 65 or older, you’ll have to sign up for Part A and Part B. To sign up, call Social Security at (800) 772-1213.
To find out more about qualifications, click here.
What does Medicare cover:
There are four parts to Medicare. They are:
Medicare Part A is Hospital Insurance and it:
- Helps cover inpatient care in hospitals (room cost, hospital meals and supplies), including critical access hospitals, and skilled nursing facilities. It does not cover custodial or long-term care.
- Helps cover hospice care and some home health care You must meet certain conditions to get these benefits.
- There is a $1,288 deductible for Part A, but once met, days 1-60 of hospitalization are covered 100%. After 60 days, you must pay a daily amount set by Medicare. You can read more about the 2016 costs here.
Medicare Part B is Medical Insurance and it:
- Helps cover doctors’ services, hospital outpatient care, and home health care.
- Helps cover tests, shots and some preventive services to maintain your health and to keep certain illnesses from getting worse (flu shots, PAP tests).
- There is monthly premium of $121.80, and a $166 annual deductible. Once the deductible is met, Part B generally pays 80 percent of the Medicare-approved amount for covered services, which means you pay 20 percent.
Part A and Part B together are commonly referred to as “Original Medicare”. Original Medicare is offered by the government, and again, in most cases you’ll automatically get Part A and Part B starting the first day of the month you turn 65 if you are already getting Social Security benefits.
Medicare Part C is Medicare Advantage Plans
Instead of getting Medicare Part A and Part B, you have a choice and you can purchase a Medicare Advantage Plan (also called “Part C”). Medicare Advantage Plans are health plans run by Medicare-approved private insurance companies, and have different rules and costs, but offer at least the same benefits of Medicare Part A and Part B, and in some cases, offer more benefits such as a prescription drug plan.
Why would someone opt to buy a Medicare Advantage Plan over getting Medicare Part A & Part B?
When it comes to Medicare the decision is yours however, you may want to get a Medicare Advantage Plan instead of Original Medicare if:
- You take prescription drugs. With a few exceptions, most prescriptions aren’t covered in Original Medicare. Many Medicare Advantage Plans include prescription drug coverage.
- You want a cap on your out-of-pocket health spending. Original Medicare has no out-of-pocket maximum. You keep paying a portion of the cost of services as you use them. Medicare Advantage plans, by law, have an out-of-pocket maximum of no more than $6,700 per year. Once you hit that limit, the plan pays for all covered expenses.
- You want an alternative to the 20-percent coinsurance charged by Original Medicare for most services. Medicare Advantage plans structure costs differently and may offer a lower (or higher) coinsurance, or may charge copays instead – which are fixed costs you pay for services. A trade-off could be a higher monthly premium.
- You want coverage for vision and dental. Original Medicare doesn’t cover these services. Certain Medicare Advantage plans do.
- To find Medicare Advantage plans in your area, click here.
Medicare Part D is Prescription Drug Coverage
There are two ways to get prescription drug coverage through Medicare – either as an add on known as Medicare Part D to your Original Medicare Plan (Part A and Part B), or as part of your Medicare Advantage Plan (Part C). There are several different Part D plans offered, and they vary in cost and medications covered. Also note that Medicare Part D is provided by private insurance companies that have contracts with the government, unlike Medicare Part A and Part B, which is provided directly by the government.
Each Medicare Prescription Drug Plan has its own list of covered drugs. Many Medicare drug plans classify drugs by tiers and each tier has a different cost associated with it. Before you choose a Prescription Drug plan, it’s best to look at the plan’s list of drugs to see if your medication(s) is covered, and how much it will cost.
To find out more about Part D coverage, click here.
What is Medicare Supplement Insurance (also known as Medigap)?
A Medicare Supplement Insurance (Medigap) policy is sold by private companies and can help pay some of the health care costs that Original Medicare doesn’t cover, such as copayments and deductibles. Medicare Supplement policies fill in the gap between what Original Medicare covers and what it doesn’t. 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. A Medicare Advantage Plan is a way to get Medicare benefits. A Medigap plan simply supplements your existing Original Medicare coverage. Medigap plans differ in price and coverage.
How can I find out more about Medicare and have my questions answered?
- Call 1-800-MEDICARE (1-800-633-4227)
- Go to the government’s helpful web site, Medicare.gov or the Centers for Medicaid and Medicare Services
Would you like my help?
If you would like to talk to me, ask a question or schedule a meeting at your home or a nearby meeting place, you can reach me at 207-370-0143 or use my simple form on the CONTACT ME page of this site to send an email message. The best part about working with me is that it will not cost you anything to meet with me to discuss your options or to review the plans that are available. I am paid by the insurance companies in the form of a commission if you enroll in a plan. You will not pay any more than anyone else and you are under no obligation whatsoever to enroll in any plans if you meet with me.
“My goal is to help you and I have found great joy in being able to offer my services to people who need my help.”