Although most Americans are aware of Medicare, there aren’t too many people who would say they truly understand it or are experts. With multiple parts, eligibility requirements, and various factors, it’s not uncommon to become overwhelmed when researching Medicare. If you or a loved one are interested in understanding more about Medicare, take a few minutes to read through our guide. We’ll explain eligibility and age requirements, other qualifications, the basic parts, and pricing. If you need more clarification on any sections, we are here to help or guide you to a trusted resource.
What is Medicare and who is eligible?
Simply put, Medicare is a federal health insurance program. During 2015, over 55 million people received health insurance through Medicare. There are basically three groups who are eligible:
- People 65 and older
- Some people under age 65 with disabilities
- People of any age who suffer from kidney failure (if it requires dialysis or a transplant)
There are, however, some Medicare qualifications. If you are 65 or older and receive Social Security checks, then you’re automatically enrolled for traditional Medicare (parts A and B—more on that later), with benefits starting on the first day of the month of your 65th birthday. If you aren’t receiving Social Security payments, you may be able to enroll in Medicare online at www.medicare.gov or by calling (800) 772-1213.
Certain disabilities or illnesses can qualify you for Medicare coverage, for instance, if you are diagnosed with Lou Gehrig’s disease and certain other disabilities. There can be a long waiting period (for example, with kidney failure, Medicare is typically unavailable until three months after you begin dialysis treatments.) If you qualify for Social Security Disability, you will get Medicare two years from when you qualify, and you will be signed up automatically. Finally, one important Medicare requirement is that you must have entered the U.S. lawfully, as well as lived for 5 years in the U.S.
What may surprise some people is that there are different parts of Medicare, which help cover certain specific services. When you qualify for Medicare, you will have to choose which parts you want.
- Part A (Hospital Insurance): Also called Original Medicare, Part A is for all inpatient hospital stays, including inpatient stays in a rehabilitation facility for physical, occupational, or speech therapy. It also covers some hospice and home health services. Note that Part A does not cover room and board in an assisted living or long-term care in a skilled nursing facility.
- Part B (Medical Coverage): Part B is managed by Medicare, providing benefits and coverage for many doctor and clinical lab services, preventative services, outpatient care, outpatient rehab, screenings, surgical fees, and medical supplies.
- Part C (Medicare Advantage Plans): Part C basically replaces Part A and Part B and combines them into one plan. It might also include prescription coverage if you choose, replacing Part D (see below). Frequently called a Medicare “Advantage” plan, it is offered by a private insurance company that has contracted with Medicare. It may be available through either a health maintenance organization (HMO) or a preferred provider organization (PPO). It is NOT a Medicare supplement plan, which is basically secondary insurance to back up services that traditional Medicare does not cover. Premiums are usually less expensive than paying for traditional Medicare Parts A and B, but be sure you know what services are covered. The old adage, you get what you pay for, applies here! Some services might be better than having traditional Medicare, while others may not be covered at all. Importantly, the issuing insurance company needs to approve hospital and rehabilitation stays, so pre-authorizations and extensions to length of stays need to be obtained…it’s up to them based on clinical information they review if they will agree to it or not. So they become another party, along with yourself and your doctors, in making decisions about your care.
- Part D (Prescription Drug Coverage): This part helps cover prescription drug costs. While this can be a standalone plan, it can also be combined with a Medicare Advantage Plan as explained above.
Note that no Parts of Medicare (A, B, C nor D), nor a Medicare Advantage Plan, cover room and board in an assisted living or long-term care skilled nursing facility.
Other Medicare requirements
You will want to pay close attention to enrollment deadlines since it’s difficult to add or drop coverage once the official enrollment periods are over. For example, if you’re not automatically enrolled, you need to sign up during the initial enrollment period (you can choose any coverage at that time). You have 7 months to do so—3 months before turning 65, the month of your birthday, and the next 3 months after your birthday month. Note that if you wait to sign up, coverage will not start for 1-3 months thereafter, so plan ahead. If you don’t enroll for Parts A or B during your initial enrollment period, you can then do so between January 1 and March 31 of each year, but you will have to pay a fine (about 10% per year not enrolled) for enrolling late. That fine stays with you every year going forward.
Finally, it’s important to know what Medicare doesn’t cover. Almost all dental care is not covered, the exception being if an emergency procedure happens when you’re in the hospital. Eye exams for glasses are not covered, and neither are hearing aids—for those, you need additional insurance or a Medicare Advantage plan. Another shock to some is that Medicare will not cover long-term care. Medicare will only assist if it is part of your rehabilitative hospital stay (for example, physical therapy after surgery). Medicare will not cover the costs of assisted living or nursing care, such as if you need assistance with certain activities of daily living.
What does Medicare cost?
Costs will vary by state and by specific health care plans. If you are looking for more specific information regarding a plan in Old Bridge, NJ, visit the Medicare Plan Finder. Following are general costs at a quick glance:
- Part A: Generally, Part A comes with no monthly premium, assuming you or your spouse worked for no less than 10 years and paid all Medicare taxes. However, in the event you and your spouse paid taxes for less than 10 years, you will have to buy the Part A coverage, which can cost up to $471 a month (2021 rate).
- Part A hospital inpatient deductible and coinsurance: Each benefit period (which starts the day you’re admitted as an inpatient to an acute-care hospital and ends when you haven’t had any inpatient hospital care for 60 days in a row) has a deductible (check with Medicare to determine exact amount). While the first 60 days have $0 coinsurance, higher amounts apply after the first 60, and then 90 days. Part A also covers sub-acute rehabilitation in a skilled nursing facility, with the first 20 days covered at 100%. From day 21 up to day 100 in sub-acute rehab, Medicare covers 80% of the bill. The 20% remainder (which totals $185.50 per day in 2021) is covered privately, or by a Medicare supplement plan if you signed up for that type of coverage.
- Part B premium: $148.50 (effective for 2021, and may be higher, according to your income, or if you enroll for Medicare Part B later than 3 months after your initial enrollment period).
- Part B deductible and coinsurance: $203 deductible per year as of 2021. Once you meet this deductible, you’ll usually pay 20% of most doctor visits and services, or outpatient therapy.
- Part C (Medicare Advantage Plans) and
- Part D premiums: These premiums vary widely based on the plan you choose, as they are offered by various private insurers. Do your homework. There are significant differences between the coverage and costs of traditional Medicare Part A and B versus Medicare Advantage Plans, particularly when it comes to coverage in skilled nursing for short-term rehabilitation.
While we have provided an introductory guide to Medicare, this certainly doesn’t cover everything you need to know. Whether you have recently become eligible or are looking into Medicare for your loved ones, making sure you have accurate information is your priority. The Medicare website (www.Medicare.gov) is a great resource to find more detailed information.
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