Medicare Simplified: Your Questions Answered

 What is Medicare Part A?

Part A is often referred to as hospital coverage and covers inpatient hospital stays, care in a skilled nursing facility, hospice care and some home health care. Basically, it covers your room and board; in other words, part A provides you a place to stay, with meals, while you receive medical services.

Medicare Part A free for most people as long as you have worked in the U.S. for at least 40 quarters (10 years). Those who did not pay Medicare taxes for 10 years or more in the U.S. can still get Medicare Part A, but pay a premium. In 2019, if you paid Medicare taxes for only 30-39 quarters pay a $240/month premium. If you paid Medicare taxes for fewer than 30 quarters, your premium is $437 per month.

What is Medicare Part B?.

The definition for Medicare Part B is outpatient services. However, Part B covers many things that happen both in and out of the hospital such as This includes doctor office visits, lab testing, diagnostic imaging, preventive care, surgeries, ambulance rides, chemotherapy and radiation, and even extensive dialysis care for people with renal failure. Though many of these procedures may occur in a hospital, they fall under Part B because physicians provide them. It is not always easy to determine what is considered inpatient vs. outpatient care.

 

Part B is optional because some people who are still working may wish to delay it until they retire. However, if you are retired and have no access to other health coverage, Medicare becomes your primary insurance and in that case Part B is a critical component of your overall health package. Many people think Part A is enough and are unpleasantly surprised when faced with unexpected medical expenses for services that need to be paid out of pocket.  The standard monthly Medicare Part B premium is $135.50 for 2019. Most people pay this amount, but higher income earners are charged a higher premium.

What is Medicare Part C?

Part C, also called Medicare Advantage, offers an alternate way to receive your medical benefits. Unlike the other parts of Medicare, which cover specific benefits, Medicare Part C is just another name for private Medicare insurance, which are entirely separate from Medicare. Your benefits come from the private plan, and you pay copays for medical care and agree to use their network of providers except in emergencies. Medicare Part C is an “all in one” alternative to original medicare. These “bundled” plans include Part A, Part B and usually Part D. If you are interested in Part C, find an insurance agent who is a Medicare expert to help you find an affordable plan that best fits your needs. Note: you must have Medicare Part A and Part B to be eligible for Part C.

What is Medicare Part D? (Prescription Drug Coverage)

Supplemental plans go by a few different names – Medigap, Medicare supplemental, etc – and pay as a secondary insurance to Medicare. This means they pay after your Medicare first pays its portion of the bill. You stay enrolled in Medicare, and Medicare sends the remainder of your bills, ie what they don’t cover, to your Medicare supplement company.

These plans are purchased from private insurance companies that are licensed to sell them, and offer a variety of coverage, terms and monthly premiums. The premium is in addition to the monthly Part B premium. Basically, the plans all do the same thing; they add on coverage to Medicare’s basic plan. Does that sound like something you need?

The answer is that you may need a supplemental plan, but you may not. In truth, no one is fully covered by the basic Medicare plan. Even with an Advantage plan, you will still have various fees to pay. How much you pay in fees depends on how often you need medical care. If you have a lot of extra expenses after Medicare pays its part, you are a good candidate for a Medicare supplement plan. Unfortunately you won’t know if you need it until you look at what the plans actually cover and compare it to the expenses leftover after Medicare is done covering you. You may not actually have a good idea if you need it or not until you have had Medicare for a few years.

Scam Alert: It’s illegal for anyone to sell you a Medigap policy if you have a Medicare Advantage Plan, unless you’re switching back to Original Medicare.

 The Bottom Line:

The Medicare benefits you need is specific to your situation – no one plan or package is right for everyone. Educate yourself as best you can and talk with a Medicare expert before making any final decisions about Medicare. A good insurance agent well-versed in all the different options should be able to help you wade through the myriad of available information.