Medicare is a federal health care program for those older than 65, managed by the federal government. It consists of four parts: Part A or hospital insurance, Part B or medical insurance, Part C or Medicare Advantage, and Part D or prescription drug coverage. If you are newly eligible for Medicare, here are some terms you should be aware of to avoid mistakes or mishaps with your Medicare coverage. So let`s dive in immediately.
Medicare Part A covers hospital inpatient care, among other things. The tricky part of this is that you can be a patient in the hospital without being an inpatient. Ask the hospital staff if you have observation status or if you are considered an inpatient. This will affect whether your Medicare coverage will kick in. In general, you are considered inpatient when you have been admitted to the hospital because of your health condition and you need hospital treatment to get better.
Suppose you do not enroll during your Initial Enrollment Period, when you are required to enroll, and later you do not qualify for a Special Enrollment Period. In that case, you will owe a late-enrollment penalty when you sign up. The Part B late-enrollment penalty adds 10% to your monthly premium for as long as you have Part B coverage. Part D also has a late enrollment fee if you go without creditable prescription drug coverage for more than 63 days before you sign up for Part D. These costs add up for seniors on a fixed income, so it is important to pay attention to your enrollment windows.
Medicare has standardized amounts that it will pay for services. Facilities that accept Medicare will accept this approved amount. Others that do not take the Medicare-approved amount as full payment can charge up to 15% above the Medicare-approved cost as an “excess charge.”
Participating providers are healthcare providers that accept Medicare and accept the Medicare-approved amount as full payment for services. In other words, these providers have Medicare Assignment – a contract between Medicare and health care providers where they have agreed on pre-determined amounts of payments for services given.
Most people have premium-free Part A because they or their spouse have at least 40 work credits. These credits are from working and paying taxes to Social Security for at least 40 quarters. If you have 30-39 work credits, you will pay a $278 Part A premium in 2023. If you have fewer than 30 work credits, you will pay a $506 Part A premium.