Medicare

 

Medicare 101

Medicare consists of four parts: 

Part A: Hospital/inpatient coverage (provided by the government)

Part B: Doctor/outpatient coverage (provided by the government)

Part C: Medicare Advantage plans (obtained through a private insurance company)

Part D: Prescription drug coverage (obtained through a private insurance company)

 

Summary of Part A Coverage and Expenses

  • Deductible: $1,676
  • Medicare pays 100% of approved charges for the first 60 days
  • 61st – 90th day of inpatient stay, you pay $419 per day 
  • 91st – 150th day of inpatient stay, you pay $838 per day
  • After 150 days of an inpatient stay, you pay 100% of the hospital/facility charges
  • Skilled Nursing Facility: Medicare pays 100% for the first 20 days, then you pay $209.50 per day up to day 100
  • Typically no monthly cost/premiums for Part A

 

Summary of Part B Coverage and Expenses

  • Deductible: $257/year
  • Medicare then pays 80% of all approved charges
  • You pay the 20% of those charges, along with any excess charges (up to 15%)
  • Durable medical equipment is covered under Part B
  • Certain injectable drugs (osteoporosis, etc.) and oral medications (cancer, ESRD, etc.) fall under Part B coverage
  • Part B premium: $185/mo from your Social Security income
    • Can be more if you have an Income Related Monthly Adjustment Amount (IRMAA) due to higher incomes

 

Initial Enrollment Period (IEP)

This is the first time you fully enroll in Medicare. Your IEP takes place from 3 months before the month you turn 65 to 3 months after. It is important to note that once your IEP has run out, you will be subject to underwriting whenever you look to change or enroll in a Medicare Supplement plan in the future.

 

Medicare Supplements / Medigap: 

Medicare Supplements, also known as Medigap insurance, are obtained through private insurance companies. They are all regulated by Medicare. This means that, although the coverage is not through Medicare, Medicare sets guidelines that regulates the coverages to make sure all plans are “standardized.” Because they are standardized, there are no network restrictions. Each standardized Medigap policy must offer the same basic benefits, no matter which insurance company sells it. The only difference is the monthly premiums that the policyholder pays. That means that a Plan G coverage with Company X that costs $100/month is the exact same coverage as a Plan G with Company Y, even though the policyholder with Company Y is paying $150/month. 

Medicare Supplements can be switched at any time. In order to switch plans, you will be required to pass a simple underwriting questionnaire about the current state of your health and your recent medical history. 

 

Medicare Advantage Plans: 

Medicare Advantage Plans are also known as Medicare Part C. These plans, administrated by private insurance companies, pay for your claims instead of Medicare. Medicare Advantage plans offer a low-cost alternative to Medicare Supplements. The coverage on these plans typically change slightly every year. Advantage plans also have networks that you must stay in when receiving care. Additionally, Medicare Advantage Plans are cheaper than Medicare Supplements, so the patient will have more copays and out of pocket expenses when they go to use their insurance.

These plans typically cost less than $20/mo. Because they are inexpensive, you will have additional copays that will need to be paid to the provider and/or facility when you receive care. Think of Medicare Advantage Plans as more “pay-as-you-go” vs. paying more up front for a Medicare Supplement. 

You can enroll in a Medicare Advantage plan during the Annual Election Period (October 15th to December 7th). Any changes made during this time will go into effect January 1st of the following year. 

 

Medicare Part D 

Medicare Part D or PDPs are plans that help cover the cost of outpatient prescription drugs. These plans are managed by private insurance companies but also must be Medicare-approved. The coverage on these plans mostly depends on which prescriptions you take and which pharmacy you get your refills at. It is important to remember, even if you don’t currently take any prescription drugs, Medicare accumulates a penalty every month that you are on Medicare without a PDP. That penalty is applied to your PDP premium at the time you do enroll in a PDP, whenever that is. 

These plans typically cost about $15/mo. You will have additional copays that will need to be paid to the pharmacy when you go refill your prescriptions. 

Prescription Drug Plans can only be changed during the Annual Election Period (October 15th to December 7th). Any changes made during this time will go into effect January 1st of the following year. 

 

Medicare is different than Medicaid. To learn about Medicaid, click here.

For more information on Medicare laws and regulations, please visit Medicare.gov.

For a free, no-obligation Medicare quote, call us at 402.830.5904 or fill out our quote form online by going here.