If you live in the US then when you turn 65 or qualify for Social Security Disability at any age, you’re automatically eligible for Medicare benefits. But how much do you know about this essential program? Parts A, B, and D comprise what is commonly known as "original" Medicare. The primary purpose of these three program components is to protect you against the high costs of hospital stays and other medical services related to sickness or injury. There are also optional add-on plans offered as part of your enrollment process. Let’s take a closer look at each part of Medicare.
Part A – Hospital Insurance
The first of the three components of Medicare is Part A, which provides insurance coverage for inpatient medical care in a hospital or other institution. A hospital stay could involve surgery, specific treatments, or just monitoring and recovery following an illness or accident. This coverage includes daily room and board charges, characteristic medical supplies, and drugs administered in the hospital. Part A has no premium because it is funded by a payroll tax on the earnings of all American workers. Part A coverage starts on the first day of the month you turn 65 and have paid taxes for 40 quarters (or ten years out of your entire working lifetime).
Part B – Medical Insurance
Part B provides supplementary medical insurance to cover some of the costs not covered by Part A. Examples include X-rays, lab tests, physical therapy, ambulance transportation, and the first 3 pints of blood. Part B, like Part A, has no monthly premium for most people. Coverage for Part B begins on the first day following the month when you turn 65 or become disabled. A one-time fee of $134, called a “premium,” is charged if you do not sign up when you first become eligible. Your premium will automatically increase each year based on the cost of health care in America. Part B coverage is provided by the Federal government and the Social Security Administration.
Part C – A Way to Receive Your Medicare Benefits
Part C is sometimes referred to as a “Medicare Advantage” plan. It is a way to receive your Medicare benefits while paying a monthly premium. Part C coverage is available from private insurance companies and local/regional health care providers. Part C plans are standardized to include the basic Medicare coverage you would receive under Parts A and B plus additional services such as dental or vision care or wellness benefits like gym memberships. Part C plans generally have a monthly premium and a yearly deductible amount. Depending on the provider and plan you choose, you may be able to switch to a different plan during each open enrollment period. Part C does not have an enrollment period; you may sign up for it at any time during the year. To learn more about Medicare plans visit Clearmatch Medicare.
Part D – Prescription Drug Coverage
Part D provides basic prescription drug coverage for most Medicare beneficiaries. It has been designed to help pay for the rising costs of prescription drugs as they become more expensive. Part D has two main features: It requires you to pay a monthly premium, and you are expected to pay a certain out-of-pocket for your prescriptions each year. Part D coverage is provided by private insurance companies and is administered by the Federal government. Part D coverage is optional, but most Medicare beneficiaries elect to enrol because they need help paying for their medications. Part D has no enrollment period, but you must enrol during the general enrollment period that occurs once a year.
Medicare Advantage Plans
These are private insurance plans that provide Medicare benefits. As we’ve discussed, there are two parts of traditional Medicare—A and B. With an Advantage plan, you also receive a Part C benefit. Health insurance companies offer advantage plans. They often have a unique name and look different from traditional Medicare. Part C coverage is provided by the Federal government and is administered by the Social Security Administration. Generally, Medicare Advantage Plans charge a monthly premium, require you to pay a deductible and provide prescription drug coverage.
How to sign up for Medicare?
You can sign up during the general enrollment period once a year. The available enrollment period is from January 1 to March 31 each year. For most people, this is the best time to sign up. Most people can sign up for Medicare online at www.Medicare.gov by going through the “sign-in” link on the front page.
Why is signing up for Original Medicare so important?
If you’re not on Medicare, you’re missing out on some crucial benefits. But if you are on Medicare, there are things you can do to get the most out of it. The most important thing to remember is that you must sign up for Original Medicare as soon as you’re eligible. If you wait to sign up, you will be charged a 10% penalty on the amount you would have paid in monthly premiums for each entire 12-month period that you were not enrolled. This can amount to thousands of dollars in additional costs. So be sure to sign up as soon as you’re eligible to avoid these penalties.
Getting on Medicare as soon as you qualify is crucial to your health and financial well-being. And while it can be hard to navigate, knowing what’s available, what to expect, and when to sign up for it can help make it easier. Remember, the sooner you get on Medicare, the sooner you can start taking advantage of your benefits. Besides the fact that there are many benefits of having a Medicare policy, it is also important to note that insurance companies will not be able to charge higher premiums for people who are above a certain age as long as they have Medicare.