New to Medicare
Whether you’re approaching your Medicare eligibility age or are already enrolled, each Medicare recipient must understand the ins and outs of their coverage.
What is Medicare?
Established in 1965, Medicare is the national health insurance program for people aged 65 and older.
The Medicare Modernization Act, which passed in 2003, expanded Medicare to include individuals with disabilities and end-stage renal disease. Today, there are nearly 60 million Medicare beneficiaries.
The Centers for Medicare and Medicaid Services (CMS) manages the Medicare program, and Social Security works in coordination with CMS to facilitate enrollment.
Medicare is Different Than Medicaid
Medicaid operates both as a federal and a state-level program to provide health care coverage to individuals with very little income. It is possible to qualify for both programs simultaneously; however, most individuals will have one or the other.
Age is the Only Eligibility Requirement
As stated above, Medicare covers all Americans, age 65 and over. Age is the only eligibility requirement for U.S. citizens.
Individuals with disabilities or end-stage renal disease can receive Medicare coverage before age 65.
The Medicare Enrollment Period is a seven-month window that begins three months before your 65th birthday, includes your birthday month, and continues the following three months. If you miss this enrollment window, you will be subject to a 10% financial penalty that may last as long as you receive benefits.
Understanding Medicare – Overview
There are four separates parts of Medicare. All of which are voluntary and work together to provide comprehensive medical coverage.
Part A is your hospital insurance. It covers all in-patient hospital stays, skilled nursing care, and treatment facilities. This first part of Medicare covers up to 100 days of in-patient medical care; however, once depleted, you’ll be left with the full cost of care.
Part B is your doctors’ insurance. It coves doctor’s services, office visits, medical supplies, and preventative services. This second part of Medicare covers 80% of all your out-patient medical services, and you pay the remaining 20%.
Part C is also known as Medicare Advantage. These are private insurance plans that allow you to expand and customize your Medicare benefits to include dental, vision, hearing, and prescription drugs.
Part D is prescription drug coverage. Local insurance companies sell these plans to lower your prescription drug costs
Each part of Medicare has separate costs.
Part A Costs
Premium – most people do not pay a monthly premium for Medicare Part A. As long as you’ve worked 40 eligible quarters (10 working years) in which you paid Medicare taxes, your part A premiums are free. If you paid Medicare taxes for 30-39 quarters, the standard premium in 2021 is $259. And if you’ve worked less than 30 quarters, the standard premium is $471.
Deductible – the standard deductible in 2021 is $1,408.
Hospital Coinsurance and Copays – when you use your part A coverage, you’ll pay coinsurance and copays out of pocket.
- $0 coinsurance for each benefit period Days 1-60
- $352 coinsurance for days 61-90
- $704 coinsurance day 91 and beyond
Part B Costs
Premium – Unlike Part A, there is a premium for your Part B benefits. In 2021, the standard Part B premiums is $148.50.
Deductible – there is an annual $198 deductible for your Part B benefits.
Coinsurance and Copays – After reaching your yearly deductible, you’ll pay 20% of all your outpatient medical care services. There is no out-of-pocket maximum, which means there is no limit to which that 20% might be. This is the biggest gap within Original Medicare, and the major Medicare beneficiaries choose to protect this liability with a Medigap or Medicare Advantage policy.
Part C Costs
Each Medicare Advantage policy includes additional benefits and services beyond what Original Medicare covers. Each of these policies varies by company, and so do the costs. Our independent agents are here to help you shop and compare Medicare Advantage plans side by side to find your most cost-effective option.
Part D Costs
Medicare Part D plans are sold by private insurance companies, which, as a result, all have different premium costs. All Part D plans are relatively affordable and similar in price. The key to finding your best plan is to check which drugs are covered before enrollment. Our team of experts is here to help find the plan covering the drugs you need.
Customizing Your CoverageAlthough Medicare provides excellent health insurance coverage, it’s far from comprehensive. As shown above, looming within your Original Medicare benefits are multiple deductibles, coinsurance, and copays. Additionally, there is no out-of-pocket maximum in which you might pay regarding the patient’s responsibility. Both Medigap and Medicare Advantage plans allow you to fill financial and service gaps within your Original benefits. Medigap – there are ten Medigap plans lettered A-N. Each plan covers a different set of finical gaps within Medicare. Medicare standardizes all lettered plans so that the benefits remain the same regardless of which carrier you purchase from. Medicare Advantage – not only covers the financial gaps within Original Medicare, but it also expands your benefits to include services such as dental, vision, hearing, and prescription drugs. Medicare Advantage exchanges all your out-of-pocket costs for a single monthly premium and is an all-in-one solution to your health care needs.
Get Help Customizing Your Benefits
The above information is a mere outline to help you understand your Medicare benefits. Please visit our other articles to get more detailed information.
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