MEDICARE PART A & PART B
Original Medicare, also known as traditional Medicare, works on a fee-for-service basis. This means that you can go to any doctor or hospital that accepts Medicare, anywhere in the United States, and Medicare will pay its share of the bill for any service it covers. You pay the rest unless you have additional insurance that covers those costs. Original Medicare provides many health care services and supplies, but it doesn’t pay all your expenses.
With Original Medicare, you go directly to the doctor/hospital when you need medical care, without prior authorization from your primary care doctor. You are also required to pay a monthly premium fee for Medicare Part B, as well as coinsurance for each service received. Original Medicare has limits on the amounts you can be charged with.
Medicare Part A and Part B make up Original Medicare, but as a part of the Medicare program, there are also Medicare Part C, which represents Medicare Advantage, and Medicare Part D, which represent prescription drug coverage. When you qualify for Medicare, it is usually Medicare Part A and Part B that you are first enrolled in. Medicare Part A generally helps pay your costs as a hospital inpatient. Medicare Part B may help pay for doctor visits, preventive services, lab tests, medical equipment and supplies, and more. Parts A & B are not in competition, but instead, they are complementary, meaning that they together provide the best health coverage in hospitals and doctor`s offices as well. There are also Medigap plans that are designed to help fill the gaps in costs left by Original Medicare. Continue reading for the breakdown of the A & B parts of Medicare.
MEDICARE PART A
Medicare part A is basically hospital insurance that covers a variety of hospital services. Part A generally covers inpatient hospital stays, skilled nursing care, hospice care, and limited home health care services. In addition, it includes inpatient care received through Acute care hospitals, Critical access hospitals, Inpatient rehabilitation facilities, Long-term care hospitals, Mental Health care, and Participation in qualifying clinical research studies.
Medicare Part A covers the entire cost of covered home health care services. If durable medical equipment is needed and it is ordered by a doctor – it is covered under Medicare Part B and you are responsible for 20% of the Medicare-approved amount.
Medicare Part A covers:
- Inpatient hospital care: This covers any tests or treatments you need while admitted to the hospital. It includes services like meals, nursing services, physical therapy, and medications that a doctor says are needed.
- Limited home healthcare: If you need care from a home health aid after you’ve been released from an inpatient hospital stay, Medicare will cover medically necessary care while you recover.
- Hospice care: Once you have made the choice to seek hospice care instead of treatment for a terminal illness, Medicare will cover most of your healthcare costs.
- Short-term skilled nursing facility stays: If you need skilled nursing facility care, Medicare will cover your stay and services for a certain amount of time.
SKILL NURSING FACILITY STAYS
Skilled nursing facility stays are covered under Medicare Part A after qualifying hospital inpatient stays for a related illness or injury. A skilled nursing facility must be certified by Medicare to be under Part A coverage. To qualify for this type of care, the hospital stay must be a minimum of three days. The day you are discharged does not count towards this minimum three-day requirement, as well as time spent under observation as an outpatient.
Skill nursing care includes:
- Semi-private room
- Skilled nursing services
- Rehabilitation services
- Medical social services
- Medications received while in Skill nursing care
- Medical supplies and equipment used in Skill nursing care
- Ambulance transportation to the nearest provider
- Dietary counseling
WHAT DOES MEDICARE PART A NOT COVER?
It is important to know that Medicare Part A does not cover all hospital costs. It does not cover your first 3 pints of blood, but if a hospital receives blood for you from a central blood bank, you may not be charged. Medicare Part A does not cover private rooms, inpatient care in a hospital is meant for you to stay in a semi-private room. If you have long-term care needs, such as a nursing home, you will have to pay for your own care out of pocket, because Part A is intended to provide care during the acute illness or injury.
To be able to enroll in Medicare Part A, you must meet one of the four criteria: 1.) You are 65 years old or older, 2.) You have a disability determined by the doctor and you receive Social Security benefits for at least 2 years (24 months) in a row, 3.) You have been diagnosed with End stage renal disease (ESRD) and 4.) You have been diagnosed with Amyotrophic Lateral Sclerosis (ALS), known as Lou Gehrig`s disease.
If you are currently receiving Social Security benefits and are under age 65, you will be automatically enrolled in Medicare parts A and B when you turn 65 years old.
MEDICARE PART A ENROLLMENT
Individuals already receiving Social Security benefits at least 4 months before being eligible for Medicare and residing in the United States (except residents of Puerto Rico) are automatically enrolled in both premium-free Part A and Part B when they turn 65th birthday. People living in Puerto Rico who are eligible for automatic enrollment are only enrolled in premium-free Part A.
Those who are not receiving a Social Security benefit will not be enrolled in Medicare by automatism. These individuals must apply by contacting Social Security. Then there are two types of enrollment: Initial enrollment and Special enrollment.
The initial enrollment period lasts for seven months, starting 3 months before your`s 65th birthday and ending 3 months after your 65th birthday. The general rule is that your coverage starts on July 1 of the year you enroll.
Special enrollment is for cases when you did not enroll in the Initial enrollment period but still want to enroll in Part A late. You may qualify to enroll during this period if you were employed by a company that had more than 20 employees when you turned 65 years old and had health insurance through your job, union, or spouse. In this case, you can apply for Medicare Part A within 8 months after your previous coverage ended.
MEDICARE PART A COSTS
Most people who qualify for Medicare do not pay for Part A. This is the case if you or your spouse worked for at least 40 quarters (10 years) paying Medicare taxes. If you didn’t work for 40 quarters, you can still enroll and pay a monthly premium for Medicare Part A.
For 2022, if you worked and paid taxes for 40+ quarters you will have a $0 premium. But if you have worked less than 40 quarters, there are some premiums you need to pay. For the period of 30-39 worked quarters, you will be paying a $274 premium for Part A, and if you have worked less than 30 quarters then your premium will be $499.
It is important to mention some cost rules for hospitalization. Inpatient hospitalization days 91 and higher are considered lifetime reserve days. You receive 60 lifetime reserve days to use over the course of your life. If you go beyond these days, you are responsible for all costs after day 91. A benefit period begins when you are an inpatient and ends when you have not received inpatient care for 60 days in a row. So in 2022, the cost for days 1-60 of inpatient care is $0/per day. If you need to stay more than 60 days, then the costs are $389/per day for days 61-90 of inpatient care, and they are $778/per day from day 91 on.
MEDICARE PART B
Medicare Part B provides insurance for outpatient medical care such as doctor visits, preventative services, ambulance services, mental health costs, and the cost of durable medical equipment. It is the other half of Original Medicare. Under Part B insurance, in most cases, you will pay 20% of the Medicare-approved amount for each item or service.
Medicare Part B in general covers, but it`s not limited to, next services and items:
- Visits to the doctor`s office
- Preventive services
- Flu shots
- Pneumococcal shots
- Outpatient mental health care
- Alcoholism counseling
- Physical therapy
- Diabetes screenings, supplies, and self-management therapy
- Durable medical equipment (wheelchairs, etc.)
WHAT DOES MEDICARE PART B NOT COVER?
Part B may cover many different services and items that are not listed, but certain coverage rules apply. But on the other hand, there are some services that Part B does not cover, but Medicare Advantage plans do, including:
- Routine hearing, dental, and vision exams
- Hearing aids or glasses (except for glasses after cataract surgery)
- Emergency assistance while traveling outside the U.S.
- Fitness club membership
- Long-term care
- Prescription drug coverage
For Medicare, Part B eligibility applies the same rules as for Medicare Part A. Primary criteria is that you must be age 65 or older and a U.S. citizen. Legal and permanent residents of the United States for at least 5 years in a row can also qualify for Part B. Finally, you can apply for it if you have been diagnosed with End-stage renal disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS). A person under the age of 65 with certain disabilities that harden normal life and requires high care and attention can apply as well.
MEDICARE PART B ENROLLMENT
All persons entitled to Medicare Part A are also entitled to enroll in Part B. An aged person not entitled to Part A may enroll in Part B if he/she has aged 65 or over and is either a U.S. citizen or lawfully admitted for permanent residence who has resided in the United States continuously for 5 years in a row. A person who is automatically enrolled in Medicare Part A is also automatically enrolled in Part B. However, because beneficiaries must pay a premium for Part B coverage, they have the option of turning it down. Those who choose to receive coverage through a Medicare Advantage plan – Part C must enroll in Part B.
There are 3 enrollment periods. The initial enrollment period is for those who become eligible for part B but are not automatically enrolled in Medicare. The initial enrollment period lasts for seven months, starting three months before the month of your 65th birthday and ending 3 months after it, and you are required to enroll in Medicare during IEP, otherwise, you will be exposed to a late enrollment penalty fee. Beneficiaries who do not file an application for Medicare benefits during their initial enrollment period could be subject to the Part B late-enrollment penalty. The general enrollment period is for the individuals who missed signing during the Initial enrollment period. The general enrollment period lasts for three months, beginning on January 1 and ending on March 31 of each year, with coverage starting on July 1 of that year. A special enrollment period may qualify you to enroll in Medicare Part B if you were employed by a company that had more than 20 employees when you turned 65 years old and had health insurance through your job, union, or spouse.
MEDICARE PART B COSTS
Medicare Part B requires you to pay a monthly premium, given based on your adjusted gross income together with a yearly deductible before coverage begins. You are also responsible for paying part of the costs that Part B does not cover. So your costs if you enroll in part B will include Medicare Part B monthly premium, coinsurance (part of the cost that Medicare does not pay), and a yearly deductible.
The standard monthly fee for Part B is $170.10 in 2022. It is higher for recipients who have higher incomes. The annual deductible for Part B is $233 in 2022. In addition, the patient pays 20% of the bill as a coinsurance payment.