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Medicare 101

There are FOUR parts to Medicare Insurance:

Part A

Medicare covers inpatient hospitalization; Skilled Nursing Facility; Home Health Care; Hospice.

Part B

Covers Primary Care and Specialist visits, lab work, X-rays, ambulance and emergency room.

Part C

Is also known as Medicare Advantage which takes over for Original Medicare. These plans typically require you to see “network” doctors and other providers.

Part D

Medicare prescription drug coverage provides protection for people who have ongoing drug costs, as well as protection from unexpected spikes in prescription drug bills in the future.

How does Medicare Work?

There are two parts to Original Medicare.

Part A Covers inpatient hospitalization.
Part B Covers most other services, except for out-patient prescription drugs which are covered under “Part D”.

Original Medicare only covers 80% of most services. Both Part A and B have various deductibles, copays, and coinsurances that you need to pay as your share. These are the gaps in the Medicare government program that most people fill in by purchasing private insurance such as a Medicare Supplement Plan (aka Medigap Plan) or a Medicare Advantage Plan. That’s why it’s important to that we work with together to find the right additional insurance that fits you.

How Much Does Medicare Cost?

The Difference in Medicare Costs

Part A is no cost because you and your employer had been paying for this during your working years. For people who first start their Medicare Part B in 2017, Part B standard premium is $134.00. Adjustments to the standard premium can occur if your income is very low, or if your income is higher than average. If you have higher than average income you could pay considerably more than the standard about of $134.00

Additional help known as “Extra Help” through Medicare is available to help pay for Part D drug plan premiums as well as the drug deductible. Depending on your income and assets there are State programs that could help in paying the Part B premium.

Medicare Deductibles

A deductible is how much you must pay out of your pocket in a calendar year before the insurance coverage kicks in. This means you pay 100% of all your medical bills up to your deductible, except for certain items that by pass the deductible, like preventive services such as a routine physicals and certain immunizations.

Medicare Copays

A Copay is a flat dollar amount you pay to your doctor or other medical provider after which Medicare pays its share. For example, if you were hospitalized and have only Original Medicare, you would first pay the Part A hospital deductible of $1340. If your hospital stay lasts longer than 60 days, you would start paying a daily copay amount of $335. Then after a stay of 90 days your copay increases to $670 per day.

Medicare Coinsurance

The coinsurance begins after you meet your deductible. For example, 2018 the Part B deductible is just $183 for the year. After you pay the $183 yearly deductible the coinsurance starts. You and Medicare share the expenses, with Medicare paying 80% and you paying 20% of Medicare approved charges.

“No Medicare Out-of-Pocket”

This means that Medicare doesn’t have any out-of-pocket limit protection. For example, if you had a major health event like a stroke, heart attack or cancer and the bill was $100,000 you would be responsible for not only the 20% coinsurance of the Medicare approved charges, but also any excess charges (excess charges are above Medicare approved rates). I advise anyone I meet with, who are starting with Medicare, to protect themselves from the gaps that exist with a Medicare Supplement or Medicare Advantage plan.

Medicare Supplement Plan or Medigap Plan

A Medicare Supplement, also known as “Medigap,” is a policy issued by many private insurance companies to fill in the gaps (deductible, copays, coinsurance, excess charges) inherent in Medicare. Policies are standardized across insurers and consistently named with letters from A to N. With Medigap Plans, there are no networks you must participate in, so you are free to go to any doctor or hospital nationwide, so long as the provider accepts Medicare.

Medicare Advantage Plan

Medicare Advantage plans, also known as Medicare Part C plans. Medicare Advantage plan are less expensive than a Medigap policy, but it has HMO and PPO networks which are a strong component. You must go to an in-network hospital, providers, and use in network pharmacies when enrolled in an Advantage plan.

Medicare Part D Drug Plan

Part D of Medicare provides drug coverage for those on Medicare. It’s sold by many private insurance companies who are required to follow guidelines set by the Centers for Medicare and Medicaid (CMS). Part D drug plans may have different deductible, copayment, coinsurance, and premium costs. You can find the right plan for you by comparing the drugs listed the various drug formularies and plan designs that are available. Everyone’s situation is different and not all plans are the same. Part of my service is help you select the right plan for you.

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