MEDICARE ABC & D's
What is Medicare and how is it structured?
Medicare is health insurance for individuals age 65+ as well as recipients of Social Security Disability Income for at least 2 years and people who have End Stage Renal Disease. Medicare is administered by the federal government in conjunction with private insurance carriers. Medicare is divided into four parts: A, B, C and D.
When one begins Medicare, there are two distinct ways to creating your health insurance future:
Either enroll in a Medicare Advantage Plan OR keep Original Medicare.
Medicare Part A: In-Hospital Care
- Part A covers inpatient hospital stays, skilled nursing facility (SNF) stays, limited home health visits, and hospice care due to diagnosis of a terminal illness.
- Part A benefits are subject to a deductible ($1,484 per benefit period in 2021).
- Part A also requires coinsurance for extended inpatient hospital and SNF stays.
- To qualify for SNF stay, one must arrive after an inpatient stay for a minimum of three days. Neither observational status nor the day of discharge count toward the three day requirement.
Medicare Part B: Outpatient Care
- Part B covers medical care, some examples include:
- Physician office visits
- Diagnostic testing - MRI, CT Scans, etc.
- Preventive services -mammography, annual wellness visit, cancer screenings
- Outpatient hospital care and surgery
- Durable medical equipment (wheelchair, oxygen, diabetic supplies)
- Ambulance in life threatening emergency
- Physical, occupational, and speech therapy
- Medication and injections given in the doctor's office/hospital setting
- Most Part B benefits are subject to a deductible ($203 in 2021) and 20% coinsurance.
Medicare Part C: Medicare Advantage Plans
- Part C is also known as Medicare Advantage (MA) and is a different way to get your Medicare benefits.
- MA plans are network-based health insurance plans provided by private companies that contract with Medicare.
- Beneficiaries enroll in a private health plan, such as a health maintenance organization (HMO) or preferred provider organization (PPO).
- MA plans include all Medicare-covered Part A and Part B benefits and typically also include Part D, prescription drug benefits.
- Some MA plans may offer coverage for vision, dental, hearing, health and wellness programs.
- Referrals and prior-authorization may be necessary, depending on the plan.
- Co-pays and cost sharing is a part of the structure of MA plans, with annual maximum financial out-of-pocket limits.
- There are MA plans specifically created for beneficiaries who are dual-eligible for both Medicare and Medicaid.
- And while the MA plan IS your health insurance, you must be enrolled in Part A and Part B.
Medicare Part D: Prescription Drug Coverage
- Part D covers outpatient prescription drugs through private plans that contract with Medicare.
- Plans can be stand-alone prescription drug plans (PDPs) or included within a Medicare Advantage plan (MA-PD).
- The Part D benefit helps pay for enrollees’ drug costs and provides coverage to fill those medications.
- All Part D plans have the same four-tier structure and can have different formulary, list of medications, it will cover.
- Enrollees pay monthly premiums and cost sharing for prescriptions, with costs varying by plan.
- Reviewing your Part D plan should be done on an annual or semi-annual basis, as plan premiums and formularies can change. This Annual Enrollment Period occurs each year between October 15 - December 7.
- Additional financial assistance is available for beneficiaries with low incomes. Contact Social Security to see if you qualify for subsidies.
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