Medicare

WHAT IS MEDICARE?

Medicare is the United States health insurance program that provides health services for people at age of 65 and older. It also can provide coverage for younger people who become eligible for Medicare based on certain diseases.

This national healthcare program is sponsored by the U.S. government and has administration under the CMS (Centers for Medicare ad Medicaid services).

It was created by the U.S. Congress as part of the Social Security Act amendments in 1965 to provide health insurance for people who were 65 or older and didn’t have any insurance policy.

There are four categories of Medicare coverage and each part covers different types of healthcare circumstances so it is important to know what benefits are included in each of those categories. 

Original Medicare includes Part A and Part B. Part A stands for hospital insurance and Part B stands for medical insurance. There are also Medicare Part C which is known as Medicare Advantage and Part D which is known as a drug coverage plan.

Medicare Part A 

Medicare Part A is a part of the Original Medicare and this type of coverage helps you to pay your bills for inpatient care like hospital stays, stays in the skilled nursing facility, hospice care, and home health care.  This type of coverage is automatic for everyone who receives Social Security benefits. If you don’t receive those benefits and are eligible for Medicare, enrollment is possible through the SSA website.

Also, it helps you get coverage for:

 

• Semi-private rooms in the skilled nursing facilities

• Inpatient care, supplies, and drugs during hospital stays

• Hospice care

• Rehabilitation services 

• Hospital meals 

Medicare Part A has free premiums if the insurer or insurer’s husband has worked for ten or more years and contributed to Medicare through their payroll taxes. 

Medicare Part B 

Medicare Part B usually covers costs for outpatient care which includes doctor’s visits, preventive services (vaccines and annual cancer screenings), ambulance services, provides for mental health coverage, lab tests, and durable medical equipment (like wheelchairs or walkers). Also, it is possible to get some prescription-administered drugs under this plan. 

Outpatients services that are also covered under Part B are:

 

• Surgeries

• Chemotherapy

• Dialysis

While Part A is premium free for most eligible Americans, there is a cost for Part B premium.  Premium is a monthly fee that Medicare beneficiaries pay and it is 170.10$ in 2022. Premiums can be adjusted annually. Also, the annual deductible is 233$  and every patient needs to cover 20% of the bill as part of the coinsurance payment.

Medicare Part C 

People who are eligible for Original Medicare (Parts A and B) are usually eligible for Medicare Part C which is also known as Medicare Advantage. Part C plans are most likely sold by private insurance companies and must provide the same amount of coverage as Original Medicare. When you decide to enroll in Part C it becomes your primary source of health coverage. Advantage plans provide insurers additional benefits like dental, vision, hearing, and prescription for drugs.

Most known Medicare Advantage plans are:

 

• High Maintenance Organization (HMO): This plan provides care within an HMO’s network of doctors and you need to choose your primary care doctor that coordinates all your healthcare needs. Also, referrals to see a specialist is needed.

• Preferred Provider Organization (PPO): it provides care within and out-of-network doctors but at higher costs.

• Private-Fee-For-Service (PFFS): with this plan, you don’t need a referral to see specialists and you can be treated by any Medicare-approved doctor that agrees to treat you and accepts your plan rates. Also, .this plan works on a visit-to-visit basis so you’ll need to check before every appointment if the doctor agrees to see you.

There are also Point-of-Service (POS)  plans that are usually a combination of HMO and PPO plans which give insurers more flexibility and Special Needs Plans (SNP) which provide coverage for insurance with certain health conditions. Most of these plans have annual limits on out-of-pocket costs.

Medicare Part D 

Medicare Part D is supplemental coverage for drug prescriptions. It is a benefit that is sold by private insurance companies and everyone who is enrolled in Original Medicare can purchase these plans. Drug prescriptions can be purchased through Medicare Advantage or a stand-alone Part D plan.  Part D is a modul of the Medicare program which is specifically designed to reduce prices for drugs and make them more affordable to eligible Americans. 

The average cost for Medicare Part D in 2022 is 33$ each month. If you decide to enroll you’ll be responsible for the same costs as with standard insurance plans like premiums, copays, and deductibles.

Medicare Supplement Plans 

Medicare Supplement Plans are also known as Medigap plans. They are sold by private insurance companies and designed to help pay for additional costs that are left by Original Medicare like coinsurance, copays, and deductibles. Before applying to get Medicare Supplement coverage you need to be enrolled in Original Medicare (Parts A and B).

Those plans are not the same as Medicare Advantage plans (Medicare Part C) because Medigap policies are just supplements to primary Medicare coverage. On the contrary, once you enroll in Medicare Advantage it becomes your primary source of health insurance coverage.

There are then different Medicare Supplement plans, from A to N and all insurers pay the monthly premiums directly to the insurance provider.

Medigap policies mostly don’t cover prescriptions, hearing, dental, vision, and long-term care.

Medicare eligibility

In, general every person who has legally lived in the USA for a minimum of five years and is 65 or older, becomes eligible for Medicare coverage. Those candidates who receive Social Security benefits are enrolled in Parts A and B automatically. 

For those who have received Social Security Disability Insurance (SSDI) for  2 years (24 months) can be enrolled in Medicare. Medicare coverage also becomes eligible immediately for younger individuals who have certain disabilities, such as amyotrophic lateral sclerosis (ALS), or permanent kidney failure.

Medicare enrollment 

If you are eligible for Medicare and receive Social Security benefits then you’ll be enrolled in Original Medicare (Parts A and B) automatically.  If you don’t receive those benefits you’ll need to enroll by yourself through the SSA website.

You become eligible for Medicare 3 months before your 65th birthday, so the best time for enrollment is in the Initial Enrollment Period. The initial Enrollment period starts three months before the 65th birthday and ends three months after the 65th birthday. If you miss this open enrollment window you still can enroll later, but you’ll have to pay the late enrollment penalty.  The annual Enrollment Period runs from the 15th of October to the 7th of December every year and your coverage begins on the 1st of January.

Also, through these open enrollment periods, you can apply for Medicare Advantage or Medicare Part D. If you want to switch back from Medicare Advantage to Original Medicare you can do so through the Annual Enrollment Period which runs from 1st of January to 31st of March. Also, during each enrollment period, you can close your drug prescription coverage (Part D) or change your part D plan.

Medicare costs

For most citizens, there is free premium Part A. Free premium Part A is for those citizens or their spouses who wave worked a minimum of 10 years and have paid their Medicare taxes. If you haven’t paid for your Medicare taxes enough amount of years you can still buy Part A premium. In 2022, the price for it is 499$ if you paid your taxes for less than 30 quarters and if you paid for them for 30-39 quarters premium will cost you 274$.

However, every enrollee must pay for Part B’s monthly premium and the monthly amount for it is 170.10$ in 2022.

If you purchase Part D your plan cost will vary depending on which type of drug plan you choose. All drug plans have different monthly premiums, but the best thing to do is to consult with a licensed Medicare insurance agent who can help you choose a plan according to your needs and budget.

Furthermore, each Medicare Advantage plan has different out-of-pocket costs and some of them won’t cover your costs if you don’t go to the doctor who is in your network. They have an annual limit on out-of-pocket costs for Parts A and be services, so once you reach those limits your plan will cover all Original Medicare costs for the rest of a calendar year,

It is important to know that if you have Medicare Supplement Plan and want to have Medicare Advantage rather than Original Medicare your Medigap policies can be used for paying your Medicare Advantage plan deductibles, copayments, and premiums. So, if you switch to Medicare Advantage consider dropping your Medicare Supplement Plan.

Medicare doesn’t pay for Medicare Supplement Plan costs, so no matter what policy you decide to choose you’ll need to pay monthly premiums for it.  Costs for each plan can depend on several factors, but in general average cost is approximately 165$ per month in 2022.