Following is a broad overview of the A,B,C's of Medicare. It is helpful to see the big picture and how all the pieces and how they fit together.
Medicare Part A: Hospital Benefits
- Available at age 65 or in case of disability for 24 consecutive months.
- No premium if you, or your spouse, worked 10 years or 40 quarters in your lifetime.
- An annual deductible is required for the first 60 days. Then from 61-90 there is a per day copay.
- Covers Medicare Approved Skilled care for the first 20 days. From days 20-100, there is a per day copay.
Medicare Part B: Medical Benefits
- Available at age 65 or upon disability for 24 consecutive months. Enrollment is required unless you have actively working and covered by your employer, or your spouses employer. If you do not enroll when first eligible, there will be penalties and waits to enroll.
- Monthly premium based on annual income as of two years ago. If your income was above a certain threshold, an Income Related Monthly Adjustment Amount (IRMAA) will be charged to the base premium.
- There is an annual deductible and 20% coinsurance for all Medicare approved medical services including lab work, diagnostic tests, etc. There is no annual limit to the 20% coinsurance.
Medicare Part C: Also known as Medicare Advantage Plans
- Plans are privatization of Medicare.
- The plans work as your primary insurer and only payor of claims. You still pay Part B premiums.
- Pays for the same services that Medicare allows/approves but may have additional coverages above and beyond Medicare as well.
- Insurers are charged co-payments and co-insurance for services, Most plans have Part D prescription drugs bundled into them.
- These plans do have provider networks that need to be utilized.
Medicare Part D: Prescription Drug Coverage (PDP)
- Available to anyone with Part B and/or Part A. Available either as part of an Advantage plan or purchased separately to pair with a Medicare Supplement plan.
- If you pay a higher premium for your Part B, you will also be assessed a higher premium for the drug plan whether it is through and Advantage Plan or a stand-alone PDP.
- All drug plans have the same 3 stages - initial/deductible, gap or donut hole and catastrophic. Deductibles and copays change annually. Costs and premiums vary by number of drugs offered on formulary and copays and deductibles charged.
- Formularies vary from plan to plan but include the base number of required drugs for all categories.
Medicare Supplement Plans: Also know as Medigap Plans
- These are standardized plans with letter names A-N that offer the same benefits by every carrier that offers them. Each carrier chooses which plans to offer, which additional benefits to include and what premium to charge.
- Plans work with Medicare. Medicare is the primary payer of medical/hospital claims and the Supplement Plan becomes the secondary payor of medical/hospital claims.
- There is no Part D prescription drugs included. The Part D plans must be purchased separately on a stand alone basis.
- There are no provider networks or referrals required on these plans. The provider only needs to accept Medicare and new patients.
Deductible - A set amount you pay out of pocket for covered services each year before Medicare of your plan begins to pay.
Copay - A fixed amount you pay at the time you receive a covered service. For example, you might pay a $20 copay to see your doctor and a $5 copay for a prescription.
Co-insurance - A percentage pf the cost of covered service that you pay when you receive it. For example, you might pay 20% for a MRI and the plan would pay the remaining 80%.