Medicare can be compared to a machine. There are parts that work together to cover a person’s health care needs. Medicare is a federal health insurance option for those who are 65 and older, those who are younger with disabilities, and those with End-Stage Renal Disease. You can learn more about Medicare’s eligibility here. Part A and Part B are the two main sectors of Medicare. Each cover different health services and come with different costs.
Part A of Medicare is also known as hospital insurance. Part A covers hospital and inpatient costs. For Part A to cover a service, it must be considered medically necessary. So, only services that help treat, diagnose, or prevent conditions are included. If you are ever unsure if a service will be covered by Medicare, you can search the service in the Medicare database. Part A covers the following:
Inpatient care in a hospital (including rehab and long-term stays).
Hospice Care (including doctor services, nursing care, medical equipment, physical therapy, occupational therapy, dietary counseling, speech-language pathology services, short-term respite care, and social work services).
Home health care (including part-time nursing care, part-time home health aide services, medical social services, physical therapy, occupational therapy, and speech-language pathology services).
Care in a skilled nursing facility (including meals, inpatient care, physical therapy, occupational therapy, dietary counseling, speech-language pathology services, and boarding in a semi-private room).
Part A comes with costs like premiums, deductibles, and coinsurance. But, good news, you may be eligible to get your premium waived. If you meet one of the following requirements, you qualify for premium-free Part A coverage:
You are 65 or older and receive benefits from Social Security or Railroad Retirement Board. Or if you are younger than 65, you have received those benefits for two or more years.
You are 65 or older and haven’t filed for any Social Security or Railroad Retirement Board benefits even though you are eligible.
You are 65 or older and you or your spouse were employed by the government and paid Medicare taxes.
You have End-Stage Renal Disease.
If you do have to pay a premium for Part A, you will pay up to $437 each month. You could pay a lot less depending on how long you paid Medicare taxes. If you paid taxes for less than 30 quarters, you will pay $437. If you paid taxes for 30-39 quarters, your premium will be $240. Depending on your specific situation, you may have to pay a deductible of $1,364 each benefit period. If your hospital stay is longer than 60 days, you will have to pay a daily coinsurance of $341. If you stay longer than 90 days, the cost is increased to a daily $682.
Part B of Medicare covers medically necessary and preventive outpatient services. So, just like with Part A, services need to either diagnose, treat, or prevent a condition. Part B covers the following:
Clinical research (including involvement in a clinical research study).
Mental Health Services (including family counseling, individual psychotherapy, group psychotherapy, psychiatric evaluation, one yearly depression screening, yearly wellness visit, non-self administered prescription drugs, and medication management).
Outpatient prescription drugs (including injectable and infused drugs, some antigens, blood clotting factors, injectable osteoporosis drugs, erythropoiesis-stimulating agents, drugs used with durable medical equipment (DME), and oral End-Stage Renal Disease (ESRD) drugs).
Ambulance Services (including transportation to a skilled nursing facility, hospital, or critical access hospital).
Second Opinions (including from a second health care professional before surgery).
Durable Medical Equipment (DME) (including wheelchairs, scooters, hospital beds, walkers, crutches, canes, patient pumps, traction equipment, oxygen equipment, blood sugar testing supplies, commode chairs, continuous passive motion devices, nebulizers, lancet devices, and Continuous Positive Airway Pressure (CPAP) devices).
Like Part A, Part B does come with some additional costs. Unlike with Part A, you must pay the Part B premium. If you receive benefits from Social Security, Railroad Retirement Board, or Office of Personnel Management, your premium will automatically be deducted from your benefit payment. If you do not receive benefits from any of the previous entities, you will receive a bill. Most people pay the standard $135.50 per month premium. Part B premiums are based on your modified adjusted gross income (MAGI). Depending on your MAGI, you can pay anywhere from $135.50- $460.50 per month in Part B premiums. To find out what you would pay, head to Medicare’s website.
The deductible for Part B is $185 per year. Additionally, after your deductible is met, you will pay 20% of the Medicare-approved amount of outpatient therapy, most doctor services, and DME.
Unfortunately, even the combination of both plans does not cover everything. Medicare is really a machine with a few missing parts. Medicare does not cover the following services and costs:
Most dental care
Eye exams relating to prescribing glasses
Hearing aids and related exams
Routine foot care
Fortunately, many health insurance providers offer Medicare supplement plans, or Medigap plans, to cover the extra out-of-pocket expenses Medicare leaves behind. There are ten available supplement plans: A, B, C, D, F, G, K, L, M, N. It’s important to note that plans C and F will be discontinued after January 1st, 2020. The available plans depend on the specific insurer. Each plan covers different aspects of out-of-pocket Medicare costs, but all plans must cover the following:
Part A hospital coinsurance
Medicare Part A supplemental hospital care for an additional 365 days after the benefits from Medicare ends
Part A coinsurance for hospice care
20% of Medicare pre-approved Part B coinsurance for hospital outpatient services
First 3 pints of blood for transfusions each year.
Most insurance companies will offer special benefits and features as part of their supplement plans. These special features include automatic enrollment into a vision plan, access to the Silver Sneakers fitness program, discounts on eyewear, discounts on contacts, and the ability to contact a nurse 24/7 by phone. It’s important to do some research before selecting an insurer for Medigap plans.
If you enroll in Medicare, you will most likely be enrolled in both Part A and Part B. To enroll in Medicare, apply online, call Social Security Monday-Friday from 7am-7pm at 1-800-772-1213, or apply in-person at your local Social Security office. Part A covers inpatient hospital services while Part B covers outpatient services. Both plans require that the services are medically necessary in order to be covered. There are extra charges and out-of-pocket expenses with both plans. There is the option of covering those costs through Medicare supplement plans. Making sure you’re covered ensures your access to necessary health services. Taking control of your health insurance plan is an important step.