The federal health program called Medicare provides those over 65 and those with certain disabilities with basic health coverage. It’s important to understand how Medicare works and the different parts.
If you’re like most people, your past health care coverage involved options offered by your employer. The complexities of enrolling in federal health coverage can come as quite a shock.
Not only are there dozens of plans and coverage types to choose from, but Medicare has its own strange terminology.
Over 10,000 people enroll in Medicare every day. Most new beneficiaries and some current ones need the parts explained in detail, which we’ve done here.
Medicare Parts Explained: The Four Parts A, B, C & D
Original Medicare consists of Part A and Part B. Whereas, Parts C and D are optional. Although, Part D covers prescriptions and if you don’t enroll when first eligible, you could be penalized.
Medicare consists of Parts A, B, C and D:
- Part A covers hospitalization.
- Part B covers medical expenses when you’re not in the hospital. This includes doctors, tests, outpatient surgery, home medical equipment, mental health treatment, and physical therapy. There are no provider networks with Part B. You can see any healthcare provider that accepts Medicare.
- Part C is a Medicare Advantage plan. It is an alternative to Original Medicare, offered through private insurance companies. Part C plans may be HMOs or PPOs and may offer additional benefits like a prescription, dental or vision coverage.
- Part D is prescription drug coverage.
Understand Medicare Premiums
Many people think that Medicare is free, but in fact, you’ll probably pay a monthly premium for your coverage. Although, Part A (hospitalization) is free for most people.
Most people pay a standard premium for Medicare Part B. However, you may pay more if your income is above a certain amount.
If you enroll in a Part C plan, you’ll still pay your Part B premium. You may also pay your insurance company an additional premium amount, depending on the plan you choose.
Part D premiums vary depending on your insurance company and your plan’s benefits. However, if your income is above a certain level, you will also pay an additional premium.
Medicare Benefits and Out of Pocket Costs 2019
Before deciding on coverage, you need to know what you’ll pay as well as where your benefits start and end.
Part A has a deductible of $1,364 in 2019. This deductible could be required multiple times throughout the year, depending on hospital admittance.
Also, you must pay a coinsurance of a few hundred dollars a day after your 60th day in the hospital. At some point after the 90th day, coverage runs out and you must pay all costs out of pocket.
The Part B deductible is $185 a year for 2019. After that, Medicare pays 80 percent of your medical costs.
Plan C replaces Medicare; so, when you enroll in a Medicare Advantage plan, you follow the insurance companies’ guidelines. Deductibles, co-pays and out of pocket costs depend on the state, the plan selected, and whether the doctors are in-network.
Prescription plans have out of pocket costs that vary, depending on plan and the cost of the medication you take.
Part D drug plans are optional, and specific rules apply.
Know Your Medicare Supplemental Coverage Options
By now you can see that Original Medicare won’t cover all your health care costs. However, supplement plans, also known as Medigap, can take care of things that Original Medicare doesn’t pay.
Medigap can offer coverage for things like deductibles, co-pays, and coinsurance.
Supplement plans are only available if you’re enrolled in Parts A and B. You can’t enroll in Medigap if you have Medicare Advantage plan.
There are 10 standardized Medigap plans, labeled Plan A through Plan N.
Medigap is private insurance. Although the plans have a standard set of benefits, different companies may charge different premiums for the same coverage.
If you sign up for Medigap during the six-month enrollment window, you’re guaranteed coverage at the best premium.
When you sign up later or decide to change plans, coverage will be underwritten; this means you’re subjected to denial or higher premiums charged more because of preexisting conditions.
What Parts of Medicare are Mandatory?
First, enrollment isn’t mandatory. However, enrollment is automatic when you received Social Security or Railroad Retirement.
If you don’t enroll in Part B or Part D when first eligible, you could incur a late enrollment penalty.
What Parts of Medicare are Free?
Medicare isn’t free. However, some receive “premium-free Part A”. This isn’t really free though; working a certain amount of time in the U.S. and paying taxes could qualify you for “premium-free Part A”.
How do I apply for Medicare?
Enrollment in Medicare Part A and B is done through Social Security. You can be complete enrollment online, in your local Social Security office or by calling the Social Security department.
Find Medigap Quotes Online
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Click here to find Medicare Supplement quotes online or call the number above to speak with a licensed insurance agent in your state!