Your Choices & Options
What Does Medicare Part A Cover?
Medicare Part A is sometimes called “Hospital Insurance.” In general, it covers inpatient care in hospitals, care in skilled nursing facilities, home health services, and hospice care. It can even help cover nursing home care (as long as it is not custodial or long-term care).
Medicare Part A Enrollment
Some individuals are automatically enrolled in Medicare Part A when they turn 65. However, if you aren’t getting Social Security or RRB (Railroad Retirement Board) benefits on your 65th birthday, you need to sign up for Medicare Part A. Another reason you might need to sign up is if you qualify for Medicare because you have End-Stage Renal Disease (ESRD).
Many people do not have to pay a monthly premium for Medicare Part A. If you or your spouse paid Medicare taxes for a total of 10 years while working, you will not have to pay this premium. For individuals with limited income and resources, your state may help you pay for Medicare Part A.
Even if you, or your spouse, did not pay Medicare taxes before retirement, you can still buy Medicare Part A if you are over 65 years old, meet U.S. citizenship and residency requirements, and aren’t entitled to Social Security, or if you are under 65, disabled, and lost your Medicare Part A coverage because you went back to work. Medicare does not require you to buy Part B, but you will be assessed a late penalty if you do not take it when it becomes available. If you have limited income, your state may provide financial assistance for your Medicare Part A and Part B coverage.
Medicare Part A Hospital Coverage and Services
Medicare Part A will cover hospital stays if a doctor makes an official order which says you need two or more nights of medically necessary treatment and the hospital formally admits you. Medicare Part A also covers you if you need the kind of care that can only be given in a hospital and the hospital accepts Medicare. Hospital services such as anesthesia, chemotherapy, and inpatient dialysis are covered by Medicare Part A as long as they are deemed medically necessary. Personal care items and private rooms are not covered by Medicare Part A unless they are considered medically necessary.
Blood is another service that the Medicare Part A program covers. As long as the hospital receives blood from a blood bank without any charge, you do not need to worry about payment. However, if the hospital needs to purchase blood for you, you must either pay the hospital costs for the first 3 units of blood you get in a calendar year or have the blood donated. This service includes blood transfusions as well as other blood work you are given in a hospital.
Medicare Part A Hospice Coverage and Services
Hospice, skilled nursing facility, and home health services are also covered by Medicare Part A. If you have a terminal illness, and your doctor has confirmed that you have 6 months or less to live, your hospice care (including pain relief, grief counseling, and other services) will be covered by Medicare. In order to receive skilled nursing facility care, a doctor must declare that you are in need of daily skilled care like physical therapy as long as you need and get the therapy services each day they’re offered. Home health services are also covered, provided you are under the care of a doctor and are also cared for by a Medicare-certified home health agency. You must be determined home-bound in order to receive these services, and the home health services are again limited to medically necessary care.
Medicare Part A Hospital Does Not Cover Private Nursing or Private Rooms….
Medicare Part A provides you with a semi-private room and meals in hospitals and nursing facilities. These services do not include private nursing or private rooms, and unless deemed medically necessary, also do not cover long-term or custodial care. Televisions and telephones are also not covered if they incur an additional charge.
What Does Medicare Part B Cover?
Medicare Part B generally covers two main types of service. The first is medically necessary services and supplies that are needed to treat or diagnose your medical condition. These must also meet accepted standards of medical practice. The second type of service that Medicare Part B covers is preventive services to help discover issues early when treatment is most likely to work best. For example, some shots and vaccines are covered.
Medicare Part B Enrollment Periods
You can enroll in Medicare Part B medical insurance during the ( IEP) Initial Enrollment Period, which begins three months before your 65th birthday and extends through the three months that follow your birth month. There is also a (SEP) special enrollment period for those who are covered by a group health plan offered by a union or employer.
If you are already receiving benefits from Social Security or the Railroad Retirement Board, you will be automatically enrolled in Medicare Part B the first day of the month you turn 65. Anyone who is not receiving Social Security or RRB benefits when they turn 65 must enroll in Medicare through Social Security.
If your birthday is on the first of the month, you will enroll in Medicare Part B on the first day of the previous month. If you are disabled and under the age of 65, you will likely automatically get Medicare Part B once you receive Social Security disability benefits for 24 months. Most people must pay a monthly premium, the cost of which may change depending on their income, to ensure Medicare Part B coverage. The premium is usually deducted from your monthly Social Security payments, depending on income.
If you were automatically enrolled in Medicare Part B and received a card in the mail, you can choose to opt out by sending the Medicare Part B card back: by keeping the card, you keep Medicare Part B and keep paying Medicare Part B premiums. If you signed up for Medicare through Social Security, contact Social Security.
If you chose not to enroll during your Initial Enrollment Period, you will have the opportunity to sign up during the General Enrollment Period, which lasts between January 1 and March 31 each year. In many cases, if you don’t sign up for Medicare Part B when you’re first eligible, you have to pay a late enrollment penalty. For every one year period that you were qualified to enroll in but opted not to, your Medicare Part B monthly premium increases by 10 percent. You pay this penalty for the entire time you have Medicare Part B. If you meet certain conditions that allow you to sign up during the Special Enrollment Period, you may not have to pay this enrollment penalty.
Medicare Part B Outpatient Care and Treatment
Medicare Part B provides patients with medically necessary outpatient health care. Physician services, nursing services, vaccinations, cardiovascular and diabetes screenings, lab services, and other preventive services are all covered by Medicare Part B. In addition, Medicare encourages all beneficiaries to complete an annual Wellness Visit…Medicare Part B will not pay for cosmetic surgery, custodial care, prescription drugs, dental or vision care, as well as some other services.
Medicare does not cover every health-related service or item. You may have co-payments and deductibles on services even if they are covered by Medicare. After you meet your deductible, your co-payments will generally cost around 20% of the Medicare-approved amount for most doctor services. If a service you need is not covered by Medicare, you must cover the costs yourself unless you have separate insurance that does.
What Does Medicare Advantage… Part C Cover?
Medicare Advantage plans allow you to receive your benefits from a private insurance company approved by Medicare. If you have Medicare Part A and Medicare Part B, you can receive your benefits from a Medicare Advantage plan. Medicare Advantage plans are not supplemental insurance, but rather health insurance plans of their own. Medicare Advantage can also include prescription drug coverage in addition to vision, hearing, and dental. In most cases, you can join even if you have been diagnosed with a pre-existing condition, except for End-Stage Renal Disease. Medicare Advantage plans must follow guidelines established by Medicare, but they can vary in terms of costs and rules.
Medicare Advantage Payments and Enrollment?
With a Medicare Advantage plan, you may be able to lower your out-of-pocket costs. Some Medicare Advantage plans have lower co-payments than Medicare Parts A and B, but are also limited to certain service areas and often involve networks. You may have to pay a premium each month due to the extra benefits you may receive from the plan. You can enroll in a Medicare Advantage Plan during your (IEP) Initial Enrollment Period, the Medicare Advantage and Prescription Drug Plan Annual Enrollment Period and there are also (SEP) Special Enrollment Periods for certain situations. The amount that you pay yourself varies from plan to plan, so it is necessary to compare plans in order to find the plan most suitable to your needs.
What are my Choices and Options with Medicare Advantage?
- Health Maintenance Organization (HMO) plans are required to cover both Part A and Part B health care, but can also offer additional benefits. You will only be able to visit physicians and hospitals that are within the HMO network unless there is an emergency. However, HMOs can lower costs, making them (in some cases) less expensive than Medicare Parts A and B.
- Preferred Provider Organizations (PPOs) allow you to use doctors, hospitals, and specialists within the PPO network. However, you are permitted to use health providers outside of the network at an additional cost to you without a referral.
- With a Private Fee for Service (PFFS) you are able to use any doctor or specialist, so long as they accept the terms, fees, and conditions of the PFFS. The plan chooses how much it will pay for the services, and you can spend more or less on PFFS plans than Medicare Parts A and B.
- In a Medicare Medical Savings Account (MSA) you combine a medical savings account with a high-deductible. Medicare gives the plan an amount of money each year for your health care and the plan deposits this money into your account. You can use this money to pay for health care costs, even if they’re not covered by Medicare. If you use it for Medicare Part A and Medicare Part B services, you can count this towards your deductible. If you have used the money provided but have additional health care costs, you’ll have to pay for the Medicare-covered services out-of-pocket. After you reach your deductible, the plan will cover Medicare-covered services.
What Does Medicare Part “D”Prescription Drugs Cover?
Medicare Part D Prescription Drug Coverage
Medicare Part D prescription drug coverage helps beneficiaries pay for covered prescription drugs bought at certain centers, including retail locations and pharmacies. This benefit could help reduce prescription drug costs significantly
Where to Get A Medicare Part D Prescription Drug Plan?
Prescription drug coverage is available to every Medicare beneficiary. But, if you don’t choose a Medicare Part D plan when you are eligible, and you don’t join a Medicare Part C plan (Medicare Advantage) that includes prescription drug coverage, you could pay a late enrollment penalty if you try to join later. Exceptions exist if you have creditable prescription drug coverage or if you receive Extra Help.
Medicare Advantage Part D Prescription Drug Coverage
Medicare Part D adds prescription drug coverage to your Medicare Parts A and B, some Medicare Cost Plans, some Medicare Private Fee-for-Service Plans, and Medicare Medical Savings Account Plans. They are offered by insurance companies and other Medicare-approved private insurers. The cost of each plan depends on the provider and your location. The Medicare Advantage and Prescription Drug Plan Annual Enrollment Period (AEP) takes place from October 15 to December 7 each year. During this period, you can get a prescription drug plan or a Medicare Part C plan.
Part D Prescription Drug Plan Late Enrollment Penalty
If you go 63 consecutive days, or more, without prescription drug coverage after your Initial Enrollment Period ends and don’t have a Medicare Prescription Drug Plan, a Medicare Advantage Plan (that offers prescription drug coverage), another Medicare health plan that offers prescription drug coverage, or creditable prescription drug coverage, you may face a penalty should you choose to enroll later. The penalty depends on the length of time you went without the coverage.
Cost of Coverage for Medicare Part D Prescription Plans Vary
Most Medicare Part D plans charge a monthly fee, or premium, that varies according to the plan you choose. The charges can be complex, and you’re likely to pay different prices for prescription drugs depending on their “tier” (more on that later). You may have your monthly premium deducted from your monthly Social Security payment. To do this, contact your prescription drug plan.
Another cost is your annual deductible. The annual deductible is the amount you pay for your prescriptions before Medicare Part D coverage starts to pay its share of your covered prescription drugs. Although deductibles can vary according to the plan you choose, no plan can charge more than the approved amount determined by Medicare.
Medicare Part D Prescription Drug Coverage Gap/ Donut Hole
Sometimes nicknamed the “donut hole,” the Medicare coverage gap represents a temporary limit on what your plan will cover for prescription drugs. In order to reach the coverage gap, you and your prescription drug plan need to spend a certain amount on covered prescription drugs in a calendar year. You will only reach the coverage gap after you and your plan spend a combined dollar amount on covered prescription drugs.
Once you’re in the coverage gap, you will only pay 25 percent of the plan’s cost for covered brand-name and generic prescription drugs.
Medicare Part D Prescription Drug Plan Catastrophic Coverage
The out-of-pocket spending threshold for policyholders for covered prescription drugs changes from year to year. After you reach this figure, you’re out of the coverage gap and automatically receive catastrophic coverage. This reduces the amount you have to pay out-of-pocket for covered prescription drugs.
When to Enroll in a Medicare Part D Prescription Drug Plan
• During your (IEP) Initial Enrollment Period: Occurs when you turn 65 (you may enroll starting 3 months before your 65th birthday, the month of your birthday, and up to 3 months after your birth month).
• When you’re under 65 and disabled: Your Medicare coverage begins 24 months after you receive Social Security or Railroad Retirement Board disability benefits.
You can sign up for Medicare Part D starting three months before your 25th month of getting these disability benefits, during the 25th month, or three months after the 25th month you received these benefits. You may owe a late enrollment penalty if you go without a Medicare Prescription Drug Plan for any continuous period of 63 days or more after the Initial Enrollment Period is over.
You will not have to pay the late enrollment penalty if you have other creditable prescription drug coverage or you get “Extra Help.”
If you have Medicare Parts A and B and don’t want to switch to a Medicare Advantage plan, then you’ll need to enroll in a stand-alone plan to avoid a late enrollment penalty (unless you have creditable coverage or are receiving Extra Help). While many Medicare Advantage plans offer prescription drug coverage as part of the plan, there are some that don’t.
A Word about the Medicare Part D Coverage Gap / Donut Hole
During your Medicare Prescription Drug Plan research, you’ve probably heard about the donut hole or coverage gap. The donut hole is a gap in coverage that occurs once you and your plan have met a pre-set spending limit for prescription drugs. When that limit is reached, you’re in the coverage gap and must pay for the cost of your prescription drugs.
Once you’re in the coverage gap, you pay 25 percent of the cost for both brand-name and You remain in the donut hole until your out-of-pocket costs reach the annual specified amount . Once that happens, you enter catastrophic coverage and leave the coverage gap. From there, you pay only a small co-pay or coinsurance for the rest of the year.
When You’re Ready to Enroll in the Plan of Your Choice…
Contact Me, Tim Specht, CSA Certified Senior Advisor at 502-491-7267 or use the secured email response form below.