Summary of Medicare eligibility and benefits

Medicare is a federal program that provides health care for people 65 years of age and older and people with disabilities, regardless of age. To be eligible, you must be a US citizen or legal US resident . For at least five consecutive years, including the year before you applied for Medicare coverage .

Registered by President Lyndon Johnson in 1965, Medicare originally had only two parts. Parts A and B, called Original Medicare, cover basic hospital and outpatient care, respectively. Since then, the program has expanded to include more "parts" and, as a result, more benefits.

Illustration by Brianna Gilmartin, Get Drug Information

Understanding the parts of Medicare and how they work together can help you enroll in coverage in a way that optimizes the care you receive.

Medicare meets the needs of more than 60 million Americans. An estimated 10,000 baby boomers will turn 65 each day through 2030, and the number of people on Medicare continues to grow.

Medicare Part A: Hospital Coverage

Part A is your hospital insurance. Covers hospital costs, hospice care, skilled nursing facility stays, rehabilitation stays, and even some home health services.

Don't assume this means that everything will pay off in the long run. Medicare has strict rules that limit the duration of coverage for these services, if at all .

Hospital stays can be expensive. The average cost for a three-day hospital stay is about $ 30,000. Thanks to Medicare, members will pay just $ 1,484 in 2021.

Medicare Part B: health insurance

Part B is your health insurance. Covers a variety of health services including doctor visits, ambulance trips, preventive screenings (for example, for cancer and heart disease), diabetic supplies, durable medical equipment, imaging tests, lab tests, restricted medications , vaccinations , visits to the health center , etc. plus.

Most of the care you receive will be on an outpatient basis, that is, outside of the hospital. It can be a doctor's office, laboratory, radiology center, or any number of locations . Even if the service is technically provided in a hospital (for example, an X-ray is taken in a hospital radiology department), Medicare does not consider you an inpatient unless you are admitted to a hospital.

Medicare Part C: Medicare Benefits

Medicare Advantage, formerly known as Medicare + Choice, is an alternative to Original Medicare that was added to the program in 1997. You can choose Original Medicare (Parts A and B) or Part C.

Medicare Advantage plans are offered by private insurance companies that have contracts with the federal government. These plans agree to cover everything that Original Medicare covers, but they may also offer additional services called supplemental benefits.

In 2018, more than 20 million Americans chose Medicare Advantage plans over Original Medicare to provide extended coverage for the services they need. Medicare Advantage plans have additional costs for beneficiaries, who generally pay higher monthly premiums than Original Medicare.

In addition, there are other types of Medicare health plans. They can provide both Part A and Part B, but many only provide Part B coverage. One type is a Medicare cost plan available in certain regions of the United States.

Medicare Part D: prescription drug coverage

Part D is prescription drug coverage that was signed in 2003 under President George W. Bush, but went into effect in 2006. As with Medicare Advantage, these plans are operated by private insurance companies, but They must meet standard rules set by the federal government.

Each plan has a different Medication Guide, and each Medicare member must decide which plan is best for them. No plan covers all drugs.

The US Census Bureau reports that the average American writes 12.2 prescriptions a year. This number increases to 27.8 prescriptions per year for those 65 and older. It's easy to see how quickly prescription drug costs can rise.

Medicare Supplement Plans: Medigap

For those who want additional coverage, a Medicare supplement plan , also known as a Medigap plan, can be considered. These plans are not officially part of the Medicare program, although the Centers for Medicare & Medicaid Services (CMS) standardize what they cover. Medigap plans are the same for all states except Massachusetts, Minnesota, and Wisconsin.

Medigap plans don't really add extra benefits to your Medicare coverage. What they do is help pay for the costs that Medicare leaves on the table, like deductibles, coinsurance, and copayments. They can even add coverage when you travel abroad.

These plans are offered by private insurers and can only be used in conjunction with Original Medicare and not with Medicare Advantage.

When to enroll in Medicare

The Medicare Initial Enrollment Period (IEP) begins three months before and ends three months after your 65th birthday. People with Social Security Disability Insurance (SSDI) are eligible for Medicare in the 25th month of receiving SSDI benefits and are automatically enrolled in the Social Security Administration program. Some people may be eligible for special registration periods based on their seniority or other health insurance they have.

There is an open enrollment period every year for people who want to change their Medicare coverage. If you want, for example, to switch from one private Medicare plan to another, or to switch from Original Medicare to Medicare Advantage (or vice versa), now is the time to do it.

The open recruitment period takes place annually from October 15 to December 7 .

Not everyone has to enroll in all parts of Medicare, but a late enrollment can cost a large number of late fees if you decide to enroll later. Part A late fees can last for years, but Part B and Part D late fees can last as long as you have Medicare.

For reference, choosing a Medicare Advantage plan over Original Medicare will not prevent you from paying Part A and Part B penalties.

How much Medicare costs

Medicare is often called socialized medicine, but it is not free. While it may be more affordable than some private insurance plans, many Americans find it difficult to pay for health care.

For those who meet certain asset and income requirements, there are Medicare savings programs that can help keep costs down.

  • Part A: Monthly Part A premiums are free for people who have worked more than 40 quarters (10 years) in a job subject to Medicare tax. Your spouses , and sometimes your former spouses and widows, are also eligible for free contributions. Those who worked the least would pay hundreds of dollars each month. For 2021, this is from $ 259 per month (for 30-39 quarters) to $ 471 per month (for less than 30 quarters of work). Incremental Part A costs include a deductible of $ 1,484 in 2021 for each hospital stay up to 60 days. For longer hospital stays, the copay is $ 371 for 60 to 90 days and $ 742 for 91 days or more. A stay in a skilled nursing facility is covered for 20 days, after which a copayment of $ 185.50 per day will be charged from the 21st to the 100th.
  • Part B: Everyone pays a monthly premium for Part B, and the more you earn, the more you pay. Medicare checks your two-year tax returns to determine the value of your premiums. There is also a one-time deductible that must be paid each year before your benefits start running ($ 203 in 2021). With the exception of preventive screenings, Medicare visits and annual health center visits are free as long as your provider agrees with the Medicare doctor's payment schedule . You should expect to receive 20% coinsurance for any Part B services you receive.
  • Part C (Medicare Advantage) and Part D: Premiums, deductibles, and copays for Medicare Advantage and Part D plans will vary depending on the private insurance company offering the plan. However, if your income exceeds a certain amount, CMS requires you to pay a fee known as the Monthly Income Adjustment (IRMAA) in addition to your monthly Part D premiums. This fee will also be added if you are a Medicare member. Advantage, which includes prescription drug coverage. IRMAA is paid directly to the government, not to the private insurance company where your plan is located.

Where to find help

Medicare is a complex program with ever-changing rules and regulations. However, figuring out how to proceed can be difficult.

If you have any questions or concerns about your Medicare coverage, you can seek help from your state health insurance assistance program. These are voluntary programs that are funded by the federal government. Alternatively, you can hire private consultants to help you with any issues you may have.

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