Medicare for Dummies
Do you really feel like reading the entire, Medicare for Dummies book? Medicare is complicated, but it doesn’t have to be. Better yet, you don’t need to devote hours and hours reading a book to understand it. In our Medicare for Dummies post, we’re going to cover the basic parts of Medicare insurance that you need to know. By the end, you’ll be more comfortable and have a better understanding of Medicare.
What is Medicare?
Medicare is the United State’s healthcare system for individuals who are over the age of 65. Medicare is also for people who can qualify with certain disabilities and End-Stage Renal Disease. Medicare insurance provides inpatient and outpatient coverage for most medical services, medication, and durable medical equipment.
Let’s cover the basics of Medicare Part A, B, and D.
Medicare is divided into 3 parts. Let’s look at the basics of these three Medicare parts:
- Medicare Part A – Your Hospital Insurance
- Medicare Part B – Your Medical Insurance
- Medicare Part D – Your Prescription Drug Coverage
Each part of Medicare provides specific types of coverage. Let’s dive a little deeper into these 3 parts of Medicare.
Medicare Part A
Medicare Part A pays for your room and board when you are in the hospital. In other words, your Part A Medicare coverage is hospital insurance.
Part A helps cover your hospital costs; such as:
- Semi-private room during a hospital stay
- Medically necessary home health care
- Limited skilled nursing facility care
- 1st 3 pints of blood
In order for Medicare Part A to cover the cost of your hospital visit, you need to be admitted and stay for two “midnights” at the minimum.
There are times when people who are in great health feel that Part A coverage is enough and they won’t need anything else. Maybe they rarely or never go to the doctor. Be careful if this is your plan. Plan A covers very little of your medical services. In fact most medical services fall under Part B; which can leave you financially vulnerable. Long story short: It’s always a safe bet to get enrolled in Medicare Parts A and B.
Part A Premium
Medicare Part A is usually free for most people if you or your spouse have worked long enough and paid Medicare taxes. Normally you need to pay Social Security and Medicare taxes while working about 40 quarters or 10 years. If you’re not sure if you qualify for premium free Part A, contact Social Security to review your status at 800-772-1213.
Part A Deductible
Your Medicare Part A deductible is not a calendar year deductible; this deductible is charged “per benefit period.”
The “benefit period” will start on the 1st day you receive services as an inpatient in a hospital. It ends once you have been out of the the hospital and haven’t received skilled care in any other facility for 60 days in a row.
What does this mean? Well, it means that it’s possible to pay more than one Part A deductible in a calendar year.
Your costs under Part A:
- Deductible per benefit period
- Days 1-60: No cost for semi private room.
- Days 61-90: You are responsible for coinsurance/copay each day.
- Days 91 (and after): You’ll begin to access your lifetime reserve. Your lifetime reserve is an additional 60 days for hospital stays that also includes a daily copay.
Part A Benefits
The following is a breakdown of your Medicare Part A benefits. It shows you what Medicare pays. You are responsible for the remaining costs unless you have a Medicare Supplement plan to cover these expenses.
Skilled Nursing Facility Care*
Services Medicare Pays
Medicare Part B
Medicare Part B pays for outpatient services that are classified as medically necessary. Medicare Part B provides coverage for medical services like:
- Surgical Procedures
- Ambulance rides
- Visits to the Doctor’s office
- Extensive dialysis care for people with renal failure
- Chemotherapy & Radiation
- Lab tests
- Diagnostic imaging
- Preventive care
Several of the above medical procedures can occur in a hospital setting and can be billed under Part B. As a patient, it’s not the easiest thing to keep track of – is it an inpatient procedure or an outpatient?
Part B Premium
Part B is not “premium free” even if you worked and paid Medicare taxes for 10 years (or 40 quarters). Your monthly Part B premium will depend on your adjusted gross income from 2 years ago. People with a very low income amount may qualify for Medicaid. If so, their Medicare Part B premiums may be covered by Medicaid in their resident state.
Part B Deductible
Medicare Part B has an annual deductible and 20% coinsurance with no maximum out of pocket limit. For example, if you need frequent doctor visits or other Part B services (chemotherapy, dialysis, or surgeries) your out-of-pocket costs can get out of hand.
The good news is you can protect yourself from financial and medical worries with a Medicare Supplement.
Medicare supplement insurance plans offer peace of mind because they can cover your out of pocket costs; which includes the Medicare copays, coinsurance, and deductibles.
Part B Benefits
The following is a breakdown of your Medicare Part B benefits. It shows you what Medicare pays. You are responsible for the remaining costs unless you have a Medicare Supplement plan to cover these expenses.
Clinical Laboratory Services
Parts A and B Benefits
Both Part A and Part B benefits help cover the costs of home health care – Medicare approved services.
Below is a breakdown of benefits. It shows you what Medicare pays. You are responsible for the remaining costs unless you have a Medicare Supplement plan to cover these expenses.
Home Health Care
Medicare Part D Benefits
Medicare Part D is a program that was created to help people lower their prescription drug costs. It is administered and sold through private Medicare insurance companies. You are not required to get Medicare Part D. However you may incur a late enrollment penalty if you don’t buy a Part D plan when eligible.
Medicare Part D Costs
Premiums & Deductibles – Since Medicare Part D is administered by private insurance carriers, the price you’ll pay for coverage will vary significantly. Your Part D monthly premium as well as your deductible can be different from plan to plan.
Your costs will differ as will the copays, coinsurance, and or deductibles. Not only that, but the medications covered can also differ as well as their cost.
What about Medicare Part C?
We’ve been learning about how Medicare is divided into 3 parts: Medicare Part A B D – but what about Medicare Part C?
Part C is another great example of how Medicare confuses us with their “letters”. Medicare Part C is a type of private Medicare insurance called Medicare Advantage. This type of insurance is usually an HMO or PPO. It is not part of Original Medicare.
In other words, Medicare Part C and Medicare Advantage are the same thing – just different names.