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? In this article we will explore the different parts of Medicare and what they are, as well as the various Medicare options available.
Medicare Parts Explained
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.
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).
Medicare 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.
Medicare 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.
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.
When you enroll in Medicare, you will be assigned a unique identifier called the Medicare Beneficiary Identifier (MBI). The medicare MBI number is a confidential and secure identifier that replaces the older Medicare identification number, which was based on your Social Security number. The MBI is used by healthcare providers to access your healthcare information and process your claims. It's important to keep your MBI confidential and only provide it to trusted healthcare providers to help protect your privacy. If you have not yet received your new Medicare card with your MBI, you can contact Medicare for assistance.
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.
Medicare Advantage vs. Original Medicare
While Original Medicare provides coverage for hospital and medical services, some people choose to enroll in a Medicare Advantage plan instead. Medicare Advantage plans are offered by private insurance companies and must provide the same coverage as Original Medicare, but they may also offer additional benefits, such as vision, hearing, dental, and wellness programs. Medicare Advantage plans often have lower out-of-pocket costs than Original Medicare, but they may also have restrictions on which healthcare providers you can see.
When deciding between Original Medicare and a Medicare Advantage plan, it's important to consider your healthcare needs, budget, and personal preferences. If you prefer to have more flexibility in choosing your healthcare providers and don't mind paying higher out-of-pocket costs, Original Medicare may be the better option for you. If you prefer a plan with lower out-of-pocket costs and additional benefits, a Medicare Advantage plan may be a better fit.
Medicare Supplement Insurance (Medigap)
Original Medicare covers a significant portion of healthcare costs, but it doesn't cover everything. That's where Medigap plans come in. Medigap plans are offered by private insurance companies and can help cover the gaps in Original Medicare coverage, such as deductibles, copayments, and coinsurance. There are 10 standardized Medigap plans, each designated by a letter (A, B, C, D, F, G, K, L, M, and N). Each plan has a different set of benefits, and the costs vary by plan and by state.
To be eligible for a Medigap plan, you must be enrolled in Original Medicare Parts A and B. You can enroll in a Medigap plan during your Medigap Open Enrollment Period, which is a 6-month period that starts the month you turn 65 and are enrolled in Part B. During this period, you have a guaranteed issue right, which means that insurance companies cannot deny you coverage or charge you more based on your health status.
To clarify, Medigap plans are offered by private insurance companies to help pay for some of the costs that Original Medicare (Parts A and B) does not cover, such as deductibles, copayments, and coinsurance.
Medicare Savings Programs
Medicare Savings Programs are state-run programs that help low-income individuals pay for Medicare costs. There are four Medicare Savings Programs:
- Qualified Medicare Beneficiary (QMB) Program: This program helps pay for Medicare Part A and Part B premiums, deductibles, and coinsurance for individuals with incomes at or below the federal poverty level.
- Specified Low-Income Medicare Beneficiary (SLMB) Program: This program helps pay for Medicare Part B premiums for individuals with slightly higher incomes.
- Qualifying Individual (QI) Program: This program helps pay for Medicare Part B premiums for individuals with slightly higher incomes than the SLMB Program.
- Qualified Disabled and Working Individuals (QDWI) Program: This program helps pay for Medicare Part A premiums for individuals who are disabled and working, but are not eligible for premium-free Part A.
To be eligible for a Medicare Savings Program, you must have limited income and resources. The income and resource limits vary by state.
Medicare covers a wide range of preventive services, including annual wellness visits, screenings for cancer, diabetes, and cardiovascular disease, and immunizations such as flu shots and pneumococcal vaccines. Preventive services can help detect health problems early, when they are most treatable, and can help you stay healthy and avoid more serious health problems in the future.
To access preventive services, you must see a healthcare provider who accepts Medicare. In most cases, preventive services are provided at no cost to you, as long as the healthcare provider accepts Medicare assignment.
Medicare and Long-Term Care
While Medicare covers a wide range of medical services, it does not cover most long-term care services, such as nursinghome care and assisted living. Long-term care services can be expensive, and many people may need to pay for them out of their own pockets or through other insurance, such as long-term care insurance.
However, Medicare does cover some limited long-term care services, such as medically necessary skilled nursing care and home health care services. To be eligible for Medicare-covered home health care services, you must be homebound and require skilled nursing care or therapy services. Medicare does not cover custodial care, which is non-medical assistance with activities of daily living, such as bathing, dressing, and eating.
If you anticipate needing long-term care services in the future, it's important to plan ahead and consider your options. Long-term care insurance can help cover the costs of long-term care services and can provide peace of mind. Medicaid is another option for low-income individuals who need long-term care services, but it may have strict eligibility requirements.
Medicare Fraud and Abuse
Medicare fraud and abuse can take many forms, including healthcare providers billing for services that were not provided, providing unnecessary services, or misrepresenting the services provided to Medicare beneficiaries. Medicare fraud and abuse can cost taxpayers billions of dollars each year and can lead to higher healthcare costs for everyone.
To protect yourself from Medicare fraud and abuse, it's important to review your Medicare Summary Notice (MSN) carefully and report any suspicious activities or errors to Medicare. You should also protect your Medicare number and only provide it to trusted healthcare providers. Be wary of unsolicited calls or emails offering free medical services or equipment, as these may be scams.
Final Word and roundup of the Medicare Parts
Medicare has four parts: Parts A, B, C, and D.
- Medicare Part A provides hospital insurance and covers inpatient hospital care, skilled nursing facility care, hospice care, and some home health care services.
- Medicare Part B provides medical insurance and covers doctor services, outpatient care, preventive services, and medical equipment.
- Medicare Part C, also known as Medicare Advantage, is an alternative to Original Medicare (Parts A and B) and is offered by private insurance companies. Medicare Advantage plans must provide at least the same benefits as Original Medicare and may include additional benefits, such as vision, dental, or prescription drug coverage.
- Medicare Part D provides prescription drug coverage, and it helps pay for the cost of prescription drugs.
Parts A, B, and D are part of the original Medicare program. Medicare Part A is also known as hospital insurance, and it covers inpatient hospital care, skilled nursing facility care, hospice care, and home health care. Medicare Part B is also known as medical insurance, and it covers doctor services, outpatient care, preventive services, and medical equipment. Medicare Part D is the prescription drug coverage that was added to Medicare in 2006, and it helps pay for the cost of prescription drugs.
Together, Parts A, B, and D provide comprehensive health insurance coverage for eligible individuals who are enrolled in the Medicare program.
It's important to note that Parts A and B are often referred to as "Original Medicare," and you can choose to enroll in a Medicare Advantage plan (Part C) or add a Medicare Supplement Insurance (Medigap) policy to help pay for some of the costs that Original Medicare does not cover.
In conclusion, Medicare is a crucial program that provides health insurance coverage for millions of Americans. By understanding the different parts of Medicare and the available options, you can make informed decisions about your healthcare and financial well-being. It's important to stay informed and vigilant to protect yourself from fraud and abuse and to ensure that you are getting the most out of your Medicare benefits.
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.