The Basics of Medicare

Medicare Part A

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Part A provides coverage for In-Patient hospital, hospice, home health and skilled nursing services. 


Costs:  Most people don't pay a monthly premium for Part A (sometimes called "premium-free Part A"). If you buy Part A, you'll pay up to $437 each month (2019). If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $437. If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $240. 


Coverage: There is a deductible of $1,364 per benefit period.  

  • Days 1-60: $0 coinsurance for each benefit period
  • Days 61-90: $341 coinsurance per day of each benefit period
  • Days 91 and beyond: $682 coinsurance per each "lifetime reserve day" after day 90 for each benefit period (up to 60 days over your lifetime)
  • Beyond lifetime reserve days: all costs

Medicare Part B

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Part B covers things like:

Costs:  The standard Part B premium amount in 2019 will be $135.50 (or higher depending on your income). However, some people who get Social Security benefits pay less than this amount ($130 on average). You'll pay the standard premium amount (or higher) if:

  • You enroll in Part B for the first time in 2019.
  • You don't get Social Security benefits.
  • You're directly billed for your Part B premiums (meaning they aren't taken out of your Social Security benefits).
  • You have Medicare and Medicaid, and Medicaid pays your premiums. (Your state will pay the standard premium amount of $135.50.)

Coverage:  $185 deductible per year(2019). After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you're a hospital inpatient), outpatient therapy, and durable medical equipment

Medicare Part C

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Your out-of-pocket costs in a Medicare Advantage Plan (Part C) depend on:

  • Whether the plan charges a monthly premium.
  • Whether the plan pays any of your monthly Medicare Part B (Medical Insurance) premium.
  • Whether the plan has a yearly deductible or any additional deductibles.
  • How much you pay for each visit or service (copayment or coinsurance). For example, the plan may charge a copayment, like $10 or $20 every time you see a doctor. These amounts can be different than those under Original Medicare.
  • The type of health care services you need and how often you get them.
  • Whether you go to a doctor or supplier who accepts assignment (if you're in a PPO, PFFS, or MSA plan and you go out-of-network).
  • Whether you follow the plan's rules, like using network providers.
  • Whether you need extra benefits and if the plan charges for it.
  • The plan's yearly limit on your out-of-pocket costs for all medical services.
  • Whether you have Medicaid or get help from your state.

Medicare Part D

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Each Medicare drug plan has its own list of covered drugs (called a formulary). Many Medicare drug plans place drugs into different "tiers" on their formularies. Drugs in each tier have a different cost.

A drug in a lower tier will generally cost you less than a drug in a higher tier. Sometimes, if your prescriber thinks you need a drug that's on a higher tier, you or your prescriber can ask your plan for an exception to get a lower copayment.

A Medicare drug plan can make some changes to its formulary during the year within guidelines set by Medicare. If the change involves a drug you’re currently taking, your plan must do one of these:

  • Provide written notice to you at least 60 days prior to the date the change becomes effective.
  • At the time you request a refill, provide written notice of the change and a 60-day supply of the drug under the same plan rules as before the change.

Medicare Supplements

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A Medicare Supplement Insurance (Medigap) policy, sold by private companies, can help pay some of the health care costs that Original Medicare doesn't cover, like copayments, coinsurance, and deductibles.

Some Medigap policies also offer coverage for services that Original Medicare doesn't cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medigap policy pays its share.

A Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.


 

8 things to know about Medigap policies 

  1. You must have Medicare Part A and Part B.
  2. If you have a Medicare Advantage Plan, you can apply for a Medigap policy, but make sure you can leave the Medicare Advantage Plan before your Medigap policy begins.
  3. You pay the private insurance company a monthly premium for your Medigap policy in addition to the monthly Part B premium that you pay to Medicare.
  4. A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you'll each have to buy separate policies.
  5. You can buy a Medigap policy from any insurance company that's licensed in your state to sell one.
  6. Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can't cancel your Medigap policy as long as you pay the premium.
  7. Some Medigap policies sold in the past cover prescription drugs, but Medigap policies sold after January 1, 2006 aren't allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
  8. It's illegal for anyone to sell you a Medigap policy if you have a Medicare Medical Savings Account (MSA) Plan.

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