If you’ve been covered by employer health insurance, when you turn 65, you’ll need to enroll in a Medicare 101 course.
But the truth is, understanding what is Medicare and the coverage you need CAN be like going back to school.
Healthcare, in general, is complicated.
Use this brief guide for a better understanding of Medicare, Parts A, B, C, and D.
What is Medicare?
Once you turn 65, you’re eligible for health insurance under the federal program; however, other individuals may also qualify for Medicare, including people of any age with a disability or individuals with end-stage renal disease.
The Medicare program has four parts. Here’s an overview of how the Medicare components work:
- Original Medicare Part A, a federal program.
- Original Medicare Part B, a federal program.
- Medicare Advantage Part C, health insurance from the private sector.
- Part D, prescription drug coverage from the private sector.
That’s the big-picture view of Medicare’s Parts. Let’s look closer at what each Part offers and how it may serve your needs.
Medicare Part A is essentially hospital insurance, covering all the basics like inpatient hospital care, skilled nursing facility, home health care and hospice care.
In most cases, you don’t have to pay the monthly premium to be covered under Medicare Part A. That’s why it’s also called Premium-Free Part A.
Americans who have worked a total of at least 10 years and paid into Medicare during that time qualify for free care. If you don’t meet this minimum guideline, you’ll be required to pay a premium for Medicare Part A.
Part A, however, will not cover your hospital costs in full. Before the benefits kick in, you’ll have to first meet a deductible. After that, Medicare Part A pays 100% of the costs (for 60 hospital days or 20 skilled nursing facility days).
This Part is insurance for medical expenses you incur that aren’t hospital related. For example, blood tests, diabetic supplies, doctor visits, and outpatient hospital care.
Medicare Part B is not free; you’ll pay a monthly premium. Most beneficiaries will also have to contribute payments toward their healthcare costs.
Once you pay the annual deductible, you’ll be responsible for 20 percent of healthcare bills.
Medicare Part C can combine all Medicare Parts under one policy. However, Part C is not a federal program; private insurance companies provide these alternatives to the parts covered under Original Medicare (Parts A and B).
Every Medicare Advantage plan must provide the same benefits as Original Medicare Parts A and B (with the exception of hospice), but they may offer additional benefits, too.
Some plans, known as MA-PD, include prescription drug coverage and offer low monthly premiums – or zero premium in some cases. Plans may also include coverage for services that are not covered by Original Medicare Parts A and B – such as dental care or eye exams.
You can purchase Medicare Part D Prescription Drug Plan (PDP) on a standalone basis. Prescription Drug Plans are offered by private insurance companies. You can choose from a variety of plans, with varying deductibles, copays and monthly premiums. Each plan may also use a different formula or list of prescription drugs that they cover. It is important to review your list of medications and compare against the plan’s formulary prior to purchasing coverage.
As you approach 65 and Medicare eligibility, or are already Medicare eligible, and thinking about switching programs, you can get expert advice while navigating the process. Get in touch with UROne Benefits today to get started!