Medicare is a public health insurance plan provided by the government and funded by taxpayers' dollars. It provides coverage for individuals aged 65 and older and those with disabilities or designated illnesses. Medicare presently covers over 59 million Americans, with the majority being senior citizens.
Navigating Medicare can be tedious due to the convoluted process of checking eligibility and getting approval. This is why Medicare agents exist, to help citizens who need health coverage to get on the plans.
Medicare comes in different plans, or Parts as they are commonly referred to. These parts provide coverage to various degrees depending on the type of care that a patient needs. Some Medicare plans carry no premium fee, while others can have income-based premium fees. There can also be gaps in the coverage provided by Medicare, so it is imperative for an applicant to know the applicable plan before applying for coverage.
Types of Medicare Plans
Medicare plans are divided into two parts; Original Medicare and Medicare Advantage. The differences between the two plans lie in their coverage and the policy providers. Original Medicare is a public health insurance plan, while Medicare Advantage is private insurance that Medicare-approved companies offer. Coverage under both is similar, with the exception of hospice care and prescription coverage.
Original Medicare is also known as traditional Medicare. It is a plan that covers individuals on a fee-for-service basis. With Original Medicare, beneficiaries can go into any hospital or provider in the country that accepts Medicare, and Medicare will cover its share of the cost. There is no requirement to inform Medicare before going to a new facility.
The catch, though, is that Medicare does not pay all of the cost. After Medicare takes care of its part of the costs, it is left to the individual to pay out-of-pocket for the rest of the cost or have it covered by additional insurance they have purchased. The copays and premiums are income-based, so individuals are never stuck with more than they can afford to pay.
Medicare Advantage is a health insurance plan that falls under the Medicare program. Private health insurance providers usually offer these plans as opposed to the government. It covers everything that Original Medicare covers, with the exception of hospice care. Individuals under this plan would have to pay out-of-pocket or get additional insurance if they require hospice care.
Medicare Advantage includes prescription coverage that is designated under Medicare Part D. Private companies that offer Medicare Advantage are approved by the Medicare program and receive a fixed amount each month for each policyholder under their coverage. Sometimes, the amount received does not entirely cover the cost of care, so insureds may sometimes be charged out-of-pocket costs.
Registering for Medicare Advantage are an alternative to signing up under Original Medicare. Policyholders who receive coverage from a Medicare Advantage plan still fall under the umbrella of Medicare.
Parts Of Medicare
Medicare consists of four well-known parts; Medicare Part A, Medicare Part B, Medicare Part C, and Medicare Part D. Medicare Part A and B are under what is known as Original Medicare. Medicare Part C falls under Medicare Advantage. Medicare Part D is a standalone plan.
Medicare Part A
Medicare Part A is covered under Original Medicare. This plan will cover the cost of hospital visits and any inpatient care when required. Medicare Part A is usually the cheapest plan as it will most times not carry any premium. Beneficiaries under Part A have already been paying into the program through taxes for the years they were in the workforce. As such, the plan is considered already paid for.
The beneficiaries are usually senior citizens aged 65 or older, with a small percentage of younger beneficiaries who are disabled. Therefore, the majority of recipients have already paid for their care through their taxes.
Medicare Part A will cover several hospital and care costs when the beneficiaries need it. The coverage ensures that insureds are not paying any cost or the minimum amount for their care.
Medicare Part A will cover;
Hospice care Inpatient care Short-term skilled nursing facility care Long-term hospital stay Intermittent or part-time home healthcare
Medicare Part A will not cover;
Long-term stays in skilled nursing facilities Private rooms for inpatient care First three pints of blood, if cost is associated with the blood
Getting Coverage Under Medicare Part A
It is essential that beneficiaries get the appropriate documentation to ensure that their cost of care is covered under this plan. Firstly, Medicare beneficiaries need to ensure that they have an official order from their healthcare provider or doctor stating the needed care for an ailment or injury. This puts the insured in a position where Medicare will cover the cost of their care.
Furthermore, beneficiaries need to make sure that the facility where they are receiving care accepts Medicare, as Medicare will not be able to cover the cost of care if the provider does not accept the plan.
If staying in a nursing home or facility, beneficiaries must make sure that both Medicare and the care facility approve the reason for being there and that there are enough days in the benefit period of the beneficiary to use for skill nursing facility stays.
Costs Associated With Medicare Part A
Although Medicare Part A is usually premium-free, there are situations where beneficiaries may need to cover part or all of their care under the plan. Length of care is one of the most common reasons for having extra costs with Medicare Part A.
Individuals who have worked for at least ten years of their lifetime and have paid for Medicare in the form of taxes do not have to pay any premium on Medicare Part A. However, there is a $1,484 deductible to be paid for each benefit period, according to data in 2021.
Longer length stays in treatment facilities will also require beneficiaries to begin paying out of pocket at some point. Beneficiaries are covered for 60 lifetime reserve days and for 90 days in a single benefit period. Once a hospital stay exceeds this, insureds will need to be out-of-pocket for all of their treatment costs from this point forward.
For inpatient stays, the length of inpatient stay will determine the coinsurance due on the part of the insured. The first 60 days are covered under Medicare Part A with coinsurance of $0. Days 61 to 90 attract a $371 coinsurance per day. For days 90 and beyond, beneficiaries under Medicare Part A will need to pay $742 per day for lengthy inpatient stays.
Medicare Part B
Medicare Part B is one of the two parts which make up Original Medicare. So it provides coverage for citizens who are 65 and older or disabled citizens. It covers outpatient medical services, with the inclusion of some inpatient services at a hospital. Part B will cover all outpatient and hospital costs, but unlike Part A, it comes with an income-based premium.
Medicare Part B can only be used for medically necessary treatment. This means that unless the outpatient services being offered will help diagnose or treat an illness, it will not be covered under Medicare Part B.
Medicare Part B will cover;
Professionally administered prescription drugs Testing like imaging and echocardiograms. Ambulance transport to the hospital Laboratory tests Organ transplants Physical and occupation therapy ER visits Medically necessary equipment like wheelchairs and oxygen equipment Dialysis Cancer screenings/biopsies Diabetes/HIV/hepatitis B, C screenings Vaccinations (Flu, hepatitis B, etc.)
Medicare Part B will not cover;
Routine/yearly physical examinations Eyecare Cosmetic/elective surgeries Alternative healthcare, e.g., acupuncture Prescription drugs Dental services Hearing aids
Getting Coverage Under Medicare Part B
Getting health insurance under Medicare Part B works similarly to Medicare Part A. Individuals who are 65 or older or disabled can get under this plan. For senior citizens, Medicare Part B will only kick in after their 65th birthday. However, they can apply three months in advance for the plan.
There are also designated illnesses under Medicare Part B that would make a beneficiary eligible before their 65 birthday. Individuals with ESRD (end-stage renal disease) are automatically qualified to apply for Medicare Part B.
To be eligible for Medicare Part A, an applicant will need to qualify for Medicare Part A. This is because individuals who have been working and paying taxes while doing so are eligible for Medicare Part A. Making them eligible for Part B. If not, then by buying Part A, an applicant can apply for Part B.
Costs Associated With Medicare Part B
Medicare Part B does carry a monthly premium. The premium is income-based, so individuals who are high earners will be charged a higher premium. Premiums are calculated using tax returns from two years ago. For 2021, the current monthly premium is around $148.50.
Eligible citizens who do not apply for Medicare Part B as soon as they're eligible are required to pay late enrollment fees. This can affect the premiums beneficiaries have to pay as it can bump up monthly premiums as high as 10% of the standard monthly premiums for the year that they first became eligible.
Deductibles also apply when using Medicare Part B. Beneficiaries would have to pay the deductible of $203 for 2021 before Medicare Part B will begin coverage.
Coinsurance and copays are also costs that can be associated with the plan. It isn't the norm for copays to apply in Part B, but there are situations where the need for a copay may arise. As for coinsurance, the typical rate for Medicare Part B is 20%.
Finally, there are no out-of-pocket maximums for Medicare Part B. This is because Original Medicare does not feature any maximums, which Part B falls under.
Medicare Part C
Medicare Part C, also known as Medicare Advantage or Managed Medicare, gives beneficiaries a choice to choose their health plans based on their needs. These health plans can feature a combination of Medicare Parts A and B, in addition to having benefits from Medicare Part D. However, unlike Parts A and B, Part C features an out-of-pocket maximum.
Although Medicare Part C is a private insurance plan, it also falls under Medicare coverage. This is because the companies that offer Managed Medicare are Medicare-approved and reimbursed for the policyholders they insure.
The insurer is required to provide policyholders with at least the same or more coverage offered under Medicare Parts A and B, but these do not have to be provided in the same way.
Getting Coverage Under Medicare Part C
To qualify for Medicare Part C, applicants will have to be 65 years or older. They can apply three months before their 65th birthday but must wait until they turn 65 to get coverage. Individuals younger than 65 with a documented disability are also eligible to apply for this plan.
There are several categories of plans under Medicare Part C. All of these carry a premium and, depending on what the insurer chooses to cover, may carry lower copays for doctor's visits and the like.
Health Maintenance Organization (HMO)
An HMO health plan is a managed health plan that requires the insured to receive care from specific providers only. The insurer will have a network of providers which the policyholder can choose from. Receiving treatment outside of the insurer's provider network will only be covered a primary care physician approves refers the patient for the treatment. Otherwise, policyholders would have to pay out of pocket for services outside the provider network.
Private Fee-for-Service (PFFS)
A private fee-for-service plan under Medicare Part B will allow policyholders to receive treatment from providers outside of the provider network, but this will cost the policyholder more in terms of the cost of treatment.
Under this circumstance, insurers will set a rate according to the plan and map out what will be paid by each party. The insurer will pay their share according to the rate, while the policyholder will cover the remainder out-of-pocket.
Preferred Provider Organization (PPO)
PPO plans under Medicare Plan C provide greater flexibility compared to HMOs. With a PPO, a policyholder is provided a network of providers which they can choose to visit under the plan. However, the policyholder is not limited to the provider network.
This plan will cover a policyholder if they choose to visit a provider outside of the insurer's provider network, but it will come at an additional cost. This is a more attractive plan in that policyholders can choose to visit specialists outside of their provider network and still have coverage to a reasonable degree.
Special Needs Plans (SNPs)
SNPs are pretty much what the name implies. They are for individuals with certain health conditions that need their plans tailored to accommodate that health condition. The SNP will be adjusted according to the needs of the patient suffering from certain diseases or health issues.
Costs Associated With Medicare Part C
Medicare Part C has some costs associated with the plan, although this can differ greatly depending on the chosen plan and the insurance provider. Rates are known to change yearly for Medicare Part C, so policyholders can expect costs for their health insurance premiums to fluctuate. Policyholders can sometimes pay as little as $0 to as high as $400.
As of 2021, the set rate for the premiums under Medicare Part C is $19 for 2022. This amount is also significantly dependent on the state the beneficiary lives in. So check out rates for your state by heading to the Medicare website.
Medicare Part D
Medicare Part D is a relatively "new" part of the Medicare program. Introduced in 2006, Part D was meant to cater to people who require self-administered drugs. An example of this is diabetics who need insulin for survival. Prescription medications are covered under this plan.
Medications covered under Medicare Part D are usually on a set standard by Medicare. However, these can differ depending on the plan that the policyholder has. Medication coverage is provided under group plans and is highly regulated by the Centers for Medicare and Medicaid Services.
Plans under Medicare Part D are required to cover at least two drugs in 148 different categories. In addition, these plans cover medications in protected classes of drugs; anti-cancer, anticonvulsant, anti-depressant, immune-suppressant, anti-psychotic, and HIV/AIDS.
Medicare Part D will cover;
Self-administered drugs, e.g., insulin All or "substantially all" protected classes of drugs At least two medications for each plan Prescription medication
Medicare Part D will not cover;
Hospital costs Inpatient care Testing, etc
Getting Coverage Under Medicare Part D
Coverage under Medicare Part D is for citizens 65 or older. Citizens under 65 who are disabled and receive Social Security Disability Insurance (SSDI) are eligible for the plan. Individuals with designated illnesses can also apply for Medicare Part D. ALS, and ESRD are designated illnesses under this plan. Children under 20 with parents who qualify for Social Security benefits are also eligible for Medicare Part D.
To enroll for coverage, applicants will have to apply within certain enrollment dates. The same goes for changing/modifying a plan and dates for dropping coverage. Each takes place during a designated time in the year, after which policyholders will need to wait for the next enrollment period to apply.
Costs Associated With Medicare Part D
Monthly premiums also apply for coverage under Medicare Part D. Beneficiaries may sometimes not have to pay any premiums. However, it is good to keep in mind that this can change depending on the plan and medications offered in the plan.
Going into 2022, the monthly premiums have been placed at $33 on average, but it is imperative that applicants check out the monthly premiums for their plans and the medication they need. Premiums in Medicare Pard D can range from $0 to $150.
Introduction To Medigap
There are various gaps in the health care coverage offered by Medicare plans. The plans differ such that there is never a comprehensive coverage plan for policyholders. This is where Medigap comes in.
Medigap is an insurance product that is sometimes referred to as Medicare supplement insurance. As the name implies, Medigap is meant to bridge the gaps present in the current insurance structure of Medicare. The cost of care can be high for policyholders. As such, they may not be able to afford the copays, coinsurances, and deductibles associated with their chosen plan.
Medigap is not meant to cover all of the costs that policyholders cannot afford. However, it can go a long way in offsetting some outstanding costs after Medicare coverage ends.
Not all Medigap plans are available to beneficiaries under Medicare but can be applied by eligible policyholders to pay off copayments, deductibles, and coinsurances associated with other Medicare plans.