Medicare 101

Medicare Insurance Plans

What Is Medicare?

Whether you are in San Antonio, Texas or Tampa, Florida, many of us are familiar with Medicare. But what about its textbook definition? Well, Medicare is a federal health insurance program for people in the U.S. who are 65 and older, and for certain younger people that have disabilities. The program was signed into law by President Lyndon Johnson in 1965, and currently covers over 60.8 million Americans.

Who Is Eligible For Medicare?

In general, individuals are eligible for Medicare if they are at least 65 years old and are a citizen or permanent resident of the United States of America.

Individuals who are under 65 years old can also be eligible if they are disabled. People under 65 and disabled must be receiving disability benefits from either Social Security or the Railroad Retirement Board for at least 24 months before Medicare automatic enrollment occurs. Additionally, you can be any age and receive Medicare if you have either end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS).

How Do I Apply For Medicare?

A few ways actually. If you are 65 and receiving Social Security or Railroad Retirement Board benefits, you will be automatically enrolled in Original Medicare (Part A&B) and you can expect your card in the mail the the three months prior to your 65th birthday.

If on the other hand you are not receiving Social Security or Railroad Retirement Board benefits, you will need to enroll ahead of time. You can start this process when you are 64 years and 9 months old, which is the start of your seven-month initial enrollment period. To do so, apply online, visit your local Social Security office, or call Medicare at 1-800-772-1213.

How Much Does Medicare Cost?

Many people may be surprised to learn that Medicare is not free.

Let’s start with Part A, which we will talk about more in depth shortly. Part A is premium-free if you have worked at least 10 years (40 quarters) and payed Medicare taxes. If you did not reach this threshold, you will have to pay for Part A, depending on the length of your work history. If you worked 30-39 quarters, you will pay $252 a month for Part A in 2020. If you worked less than 30 quarters, you will pay $458 a month for Part A in 2020.

With Part B, which we will talk about more in depth shortly, there is a premium due for everyone in America, unless you qualify for full-Medicaid benefits. This amount is dependent on your yearly wages, not work history. Most people will pay $144.60 a month for Part B in 2020, but check the chart here to see what you will pay.

What If I Plan Keep Working Past Age 65?

If you plan to keep working past age 65, then you may be able to delay enrolling in Medicare (dependent on the coverage you have at work). If you find that the work health insurance is getting pricey or the benefits are not as good good compared to Medicare plan options, enrolling in Medicare may make sense for you when first eligible. We recommend to check with your benefits administrator to see what is possible.

Keep in mind that while Part A may be premium-free for you, Part B will not, so take that into account if you want to sign up when you first turn 65 and are still working.

What Are The Parts Of Medicare?

Part A- Hospital Insurance 

In a nutshell, the following are covered by Part A:

  1. Inpatient care in a hospital
  2. Inpatient care in a skilled nursing facility (not custodial or long-term care)
  3. Hospice care
  4. Home health care
  5. Inpatient care in a religious non-medical health care institution

Here are some more details:

  • Part A covers hospital stays (including stays in a skilled nursing facility) if certain criteria are met (the hospital stay must be at least three days, three midnight’s, not counting the discharge date)
  • The nursing home stay must be for something diagnosed during the hospital stay or for the main cause of hospital stay like for instance, hospital stay for broken hip and then nursing home stay for physical therapy would be covered
  • If the patient is not receiving rehabilitation but has some other ailment that requires skilled nursing supervision, then the nursing home stay would be covered
  • The care being rendered by the nursing home must be skilled, as Medicare Part A does not pay for custodial, non-skilled, or long-term care activities, including activities of daily living (ADLs) such as personal hygiene, cooking, cleaning, etc
  • The maximum length of stay that Medicare Part A will cover in a skilled nursing facility per ailment is 100 days (the first 20 days would be paid for in full by Medicare with the remaining 80 days requiring a co-payment)
  • If a beneficiary uses some portion of their Part A benefit and then goes at least 60 days without receiving skilled services, the 100-day clock is reset and the person qualifies for a new 100-day benefit period

*Keep in mind that deductibles, copay’s, and coinsurance’s may apply for Part A coverage. For instance, you will have to pay a deductible of $1,408 for each benefit period in the hospital and a copay of $352 a day if in the hospital past day 60. In addition, you will have to pay $176 per day, if in a skilled nursing facility past day 20.  

Part B- Medical Insurance:

In a nutshell, the following are covered by Part B:

  1. Doctor’s visits for outpatient care
  2. Lab services and X-rays
  3. Preventive care services
  4. Durable medical equipment (DME)
  5. Ambulance services
  6. Vaccination coverage

Here are some more details:

  • Part B medical insurance helps pay for some services and products not covered by Part A, generally on an outpatient basis. Part B is optional and may be deferred if the beneficiary or their spouse is still actively working. There is a lifetime penalty (10% per year) imposed for not taking Part B, if not actively working.
  • Part B coverage includes physician and nursing services, x-rays, laboratory and diagnostic tests, influenza and pneumonia vaccinations, blood transfusions, renal dialysis, outpatient hospital procedures, limited ambulance transportation, immunosuppressive drugs for organ transplant recipients, chemotherapy, hormonal treatments such as lupron, and other outpatient medical treatments administered in a doctor’s office. Medication administration is covered under Part B only if it is administered by the physician during an office visit.
  • Part B also helps with durable medical equipment (DME), including canes, walkers, wheelchairs, and mobility scooters for those with mobility impairments. Prosthetic devices such as artificial limbs and breast prosthesis following mastectomy, as well as one pair of eyeglasses following cataract surgery, and oxygen for home use is also covered.
  • As with all Medicare benefits, Part B coverage is subject to medical necessity. Complex rules are used to manage the benefit, and advisories are periodically issued which describe coverage criteria. On the national level these advisories are issued by CMS, and are known as National Coverage Determinations (NCD). Local Coverage Determinations (LCD) only apply within the multi-state area managed by a specific regional Medicare Part B contractor, and Local Medical Review Policies (LMRP) were superseded by LCDs in 2003.

*Keep in mind that deductibles, copay’s, and coinsurance’s may apply for Part B coverage. For instance, you will have to pay a yearly deductible of $198 and then a coinsurance of 20% for all services thereafter. Unlike Medicare Advantage and some Medicare Supplement plans, there is no yearly limit for what you pay out-of-pocket. So if you have a $1,000,000 hospital bill, you are liable for $200,000 of it, or 20%!

What Is Not Covered By Medicare Part A&B?

Good question, well here are some items and services that Original Medicare does not cover:

  • Most dental care
  • Eye exams related to prescribing glasses
  • Dentures
  • Cosmetic surgery
  • Massage therapy
  • Routine physical exams
  • Acupuncture
  • Hearing aids and exams for fitting them
  • Long-term care
  • Concierge care (ie. boutique medicine)

Part C- Medicare Advantage:

So now that you know about Original Medicare (Part A&B), let’s take a look at the next part.

Medicare Advantage plans are referred to as a Part C plan. These are Medicare-approved private health insurance plans for those individuals enrolled in Original Medicare, Part A, and Part B. When you join a Medicare Advantage plan, remember that you are still in the Medicare program and must continue paying your Part B premium.

Medicare Advantage plans provide all of your Part A (hospital insurance) and Medicare Part B (medical insurance) coverage. These plans generally offer additional benefits, such as vision, dental, hearing and many include prescription drug coverage. These plans often have networks, which simply means you may have to see certain doctor’s and go to certain hospital’s in the plan’s network to receive care. Medicare Advantage plans may potentially save you money because out-of-pocket costs in these plans can be lower than with Original Medicare, Part A, and Part B in some cases.

For more information on Part C or Medicare Advantage plans, check out our dedicated page.

Part D- Prescription Drug Coverage:

As a Medicare beneficiary, one does not automatically receive Medicare Part D prescription drug coverage. This Medicare Part D coverage is optional, but can be valuable if you take medications. If you do not sign up for Medicare Part D coverage when you are first eligible, you might have to pay a late-enrollment penalty if you decide to enroll at a later time.

Many people are automatically enrolled in Original Medicare, Part A and Part B, when they reach 65 years of age. But one may not realize that Original Medicare does not cover most of your medication’s (except those you may receive as a hospital inpatient, or in some cases, outpatient). Medicare Part B covers certain prescription drugs that you get in an outpatient setting, like a doctor’s office. However, these tend to be the kind of medications that you need a doctor to give you, like infusion drugs. If you want help with most other medication costs, you’ll need to sign up for Medicare Part D coverage.

For more information on Part D or Medicare Prescription Drug plans, check out our dedicated page.

Medicare Supplemental Insurance (Medigap)

Medicare Supplemental Insurance or Medigap, is different than Medicare Advantage (Part C), as it supplements Original Medicare only. These plans are offered by private companies, and can help pay some of the costs that Original Medicare does not cover, such as co-payments, co-insurances, and deductibles.

For more information on Medicare Supplements or Medigap, check out our dedicated page.

More A Visual Learner? Here Is A Quick Recap:

Did You Know?: There are varying enrollment periods for Medicare and it can often be quite confusing for people. For instance, you may qualify for a Special Election Period (SEP) if you are on your state’s Medicaid program or receiving “Extra Help” from the federal government with your prescription drug costs, which allow’s you to change coverage at multiple points throughout the year. If you would like us to help you determine if you qualify for “Extra Help”, that is something we definitely do for our clients here in San Antonio, Texas and beyond.

The Harrin Group offers free, comparative quotes on Medicare insurance plans from multiple insurance carriers so you can get the best possible rate.

Want to see how much we can save you? Just request a quote to find out.

Source: Medicare.gov, Aetna Medicare, Social Security Administration