Medicare is a government national health insurance program in the United States which has started in 1965 under the Social Security Administration (SSA). Its primary function is to provide healthcare for people who are 65 or older. Still, it is also for younger people with disability status determined by SSA, including people with end-stage renal disease and amyotrophic lateral sclerosis (ALS).
Medicare is now under the administration of the Centers for Medicare and Medicaid Services (CMS). It is divided into four main parts: A, B, C, and D. Part A stands for hospital insurance, Part B is medical insurance coverage, and Part D is drug prescription coverage.
Part C is also known as the Medicare Advantage plan, and it works as a substitute for Original Medicare (Parts A and B). Part C plans are sold by private insurance companies like Turning 65 Solutions.
Medicare consists of four parts. Part A and B are also known as Original Medicare and they provide their beneficiary with hospital and medical insurance coverage. Part D is a stand-alone drug prescription plan which can be purchased alongside the Original Medicare.
Part C or Medicare Advantage has its plans of coverage and the Medicare Advantage plan you choose becomes the primary source of your health insurance. Part C plans often have drug prescriptions included in their benefits.
Medicare Part A
Medicare Part A covers inpatient hospital services for all Medicare beneficiaries. Those benefits include :
- Inpatient hospital care: to receive this type of coverage beneficiary must be admitted to the hospital as an inpatient because the doctor ordered it to because you need to treat illness or injury. Also, a hospital needs to accept the terms of Medicare. Inpatient care also includes semi-private rooms, meals, and nursing. Beneficiaries are covered up to 90 days for each benefit period in general hospitals and additional 60 reserved stays.
- Skilled nursing facility care: this benefit is covered for a limited amount of time only if you have day stays in hospitals left in your benefit period. A benefit period begins the day beneficiary is admitted to the skilled nursing facility or hospital and ends when you aren’t in the hospital for 60 days in a row. When one benefit period ends, the other begins, and you are responsible for Part A deductible for each benefit period which is 1556$ in 2022. It is also covered if you have a qualifying inpatient hospital stay if you stayed for 3 days in inpatient skilled nursing facility care. However, you can get SNF coverage if your doctor decided that you need nursing facility care daily because of certain medical conditions. If the beneficiary stays in SNF from 21 to 100 days coinsurance is 194.50$ per day.
- Long-term care: these services include rehabilitation, respiratory therapy, treatment of head trauma, and other treatments after severe injuries.
- Nursing home care: this is inpatient care in a skilled nursing facility which is not long-term care or custodial care
- Hospice care: Part A covers hospice care if is medically necessary and doctors think that beneficiaries need hospice care because of terminal illness ( 6 months or less life expectancy). It also covers if the beneficiary chooses palliative care to treat an illness or if the beneficiary signed a statement in they want hospice care instead of other Medicare treatments. Hospices care often costs zero dollars (5$ is a copayment for drugs that help kill pain).
- Home health services: beneficiaries are eligible for home health services if they are under constant doctor care
Medicare Part B
Part B covers medically necessary services (all supplies that are needed for treatment or diagnosis of certain medical conditions) such as preventive care services. Part B benefits include:
- Doctor visits
- Clinical research: Part B may cover costs for clinical research services like doctor’s office visits and tests
- Ambulance services: ambulance transportation if is it medically necessary because driving in another vehicle can endanger the beneficiary’s health or if is needed because the beneficiary needs necessary hospital services or a skilled nursing facility
- Durable medical equipment: Part B covers this kind of equipment after a doctor’s prescription. DME which can be included is blood sugar meters and test strips, walkers, wheelchairs, scooters, hospital beds, crutches, canes, nebulizers, etc.
- Mental health: helps pay for outpatient services connected with mental health like depression screenings, individual psychotherapy, family counseling, medications, psychiatric evaluation, etc. It also may cover a program of partial hospitalization if you fill specific requirements.
- A limited number of outpatient drug prescriptions: drugs that are used alongside durable medical equipment, injectable osteoporosis drugs, etc.
Medicare Part C
Medicare Part C is also known as Medicare Advantage and those plans are sold by private insurance companies certified by Medicare. If you choose to join a Medicare Advantage plan, it becomes your primary source of coverage, instead of Original Medicare. Also, Part C can offer additional coverage, such as vision, hearing, dental, health, and wellness programs. Most Medicare Advantage plans also include Medicare prescription drug coverage benefits, known as Part D.
Medicare pays a fixed amount for your care every month to the companies offering Medicare Advantage plans. Even though companies must follow the rules set by Medicare each plan can charge different out-of-pocket costs and can have different rules for how you get services.
Since Part C must cover the same basic services as Original Medicare (Parts A and B) the coverage of those plans includes inpatient and outpatient care. It must provide beneficiaries with hospital and medical services as well as skilled nursing facility services and home facility care. However, hospice care stays under Original Medicare.
Medicare Advantage plans cover the same benefits for outpatient services as Part B which includes doctor visits, tests,x-rays, ambulance services, mental health services, durable medical equipment, etc.
However are a few extra benefits that Medicare Part C covers, but Original Medicare does not. Some of the services that Part C may include as extra benefits are: Routine dental, vision, and hearing care (including x-rays, dentures, contacts and eyeglasses, and hearing aids), Fitness benefits such as exercise class or something alike (SilverSneakers membership), emergency medical assistance while outside the U.S. And allowance to buy health care products. But not all Medicare Part C plans cover these extra benefits, as well as they are not limited to only named possible benefits.
Some of the Medicare Advantage plans beneficiaries may purchase are:
- High Maintenance Organization (HMO): with this plan you always need to stay within the provider’s network because there is no coverage for going to doctors and hospitals out of network. Also, you need to pick your primary care physician who will coordinate your every medical need. This means that you will also need a referral to see specialists.
- Preferred Provider Organization (PPO): with this plan, you don’t need to choose a PCP nor do you need to stay in the PPO’s network of doctors. However, you will pay extra if you seek out-of-network services so it is recommended that you stay in network. You also don’t need referrals to see specialists.
- Special Needs Plans (SPN): these plans serve beneficiaries with unique medical needs (chronic conditions like heart disease etc.) This plan is required to include a prescription drug plan as part of it.
Medicare Part D
Medicare Part D is insurance that covers drug prescriptions. You pay a monthly premium to an insurance carrier for your Part D plan. In exchange, you use the insurance carrier’s network of pharmacies to purchase your prescription medications. Instead of paying full price, you will pay a copayment or percentage of the drug’s cost and an insurance company will pay the rest. It is a stand-alone plan that is purchased alongside Original Medicare, unlike Medicare Advantage plans that may have drugs prescription included as additional benefits.
Therefore, Part D always includes these types of drugs for their beneficiaries:
- HIV/AIDS treatment
- Antipsychotic medications
- Anticonvulsive treatments for seizure disorders
- Anticancer drugs (unless they are being covered under Part B)
Part D also covers most vaccines if they aren’t already covered under Medicare Part B.
Medicare also has a standard level of coverage for prescription drug plans, which can vary in the prescription drugs they cover and their costs. Part D plans have their drug formulary list of which drugs are covered by a specific plan. The plans include brand-name and generic prescription drugs. They need to cover at least two drugs for each of the most commonly prescribed categories and classes. If your certain prescription drug is not on your plan’s formulary, a similar drug should be available to purchase. A beneficiary can request an exception if none of the drugs on the formulary will help with your certain condition.
Plans place their covered drugs into tiers on their formularies and it cost can vary from plan to plan.
It is good to know as much as you can about Medicare eligibility so that you can be prepared when the time comes to enroll. The following criteria are necessary for Medicare eligibility:
- be age 65 or older and eligible for Social Security
- be permanently disabled and receive disability benefits for at least two years
- have been diagnosed with End-Stage Renal Disease (ESRD)
- have been diagnosed with Lou Gehrig`s disease (ALS – Amyotrophic Lateral Sclerosis)
When you reach the age of 65 and become eligible for Social Security, you may be automatically enrolled in Medicare Part A. But if you are not receiving retirement benefits from Social Security, enrollment in Medicare Part B is not automatic, you must sign-up when you meet the age requirement.
After you get disability benefits from Social Security for 24 months you will automatically be enrolled in Original Medicare – Part A and Part B.
End-Stage Renal disease (ESRD) is a state of permanent kidney failure that requires dialysis treatment or a kidney transplant. If you are diagnosed with ESRD, you will need to sign up for Medicare, because enrollment is not automatic.
If you are diagnosed with ALS you will automatically be enrolled in Medicare Part A and Part B in the same month your disability benefits begin.
PREMIUM-FREE MEDICARE PART A
Most Medicare members don’t have to pay a premium for Medicare Part A if they or their spouse paid Medicare taxes while working for at least 10 years (or 40 quarters). If you Are not eligible for premium-free Part A, you will have to pay a monthly premium of $274 up to $499 in 2022.
For members who are interested in premium-free Medicare Part A coverage, the following criteria are required:
- 65 years old and already receiving retirement benefits from Social Security or Railroad Retirement Board
- 65 years old and eligible to receive Social Security or Railroad benefits but have not filed them yet
- 65 years old who were Medicare-covered employed through the government
- Under the age of 65 and received Social Security or Railroad Retirement Board disability for 24 months
- A person diagnosed with End-Stage Renal Disease (ESRD) and meets determined requirements
MEDICARE ADVANTAGE ELIGIBILITY
Medicare Advantage (Part C) is an alternative way to get your Medicare Part A and Part B benefits. Medicare Advantage plans are available through Medicare-approved private insurance companies. To be eligible for Medicare Part C, you must already be enrolled in Original Medicare – Part A and Part B, and you must reside within the service area of the Medicare Advantage plan you want.
In 2021, there has come important change for people diagnosed with ESRD. Now if you have ESRD you may qualify for Medicare Advantage if you meet the usual criteria for the stated disease.
If you have Medicare Part C, you must continue paying your Part B premium even if you enroll in a Medicare Advantage plan. Monthly rates and plan coverage for Medicare Advantage plans vary by the insurance company you choose and your specific plan details.
But be aware that Medicare Part C is optional, and there is no penalty for not signing up. But you must have Medicare Part A and Part B to get Part C and live in the service area of a Medicare Advantage plan.
MEDICARE PART D ELIGIBILITY
Medicare Part D covers prescription drugs and, like Medicare Advantage, is available through private insurance companies that are approved by Medicare. To be eligible to enroll in a Medicare Part D prescription drug plan, you must have Medicare Part A and/or Part B and you must live in the service area for the prescription drug plan in which you want to enroll. To be eligible to enroll in a Medicare Advantage plan with prescription drug coverage, there are the same criteria as they are for enrolling in Part C, you must have Medicare Part A and Part B, and you must live in the service area for the plan you’re considering.
MEDICARE ENROLLMENT PERIODS
There are six Medicare enrollment periods with their own set of rules that apply. If you don’t qualify for automatic enrollment, you’ll need to enroll during one of these enrollment periods. Here is a breakdown of each Medicare enrollment period.
INITIAL ENROLLMENT PERIOD
For most people, the Medicare Initial Enrollment Period (IEP) lasts for 7 months and begins 3 months before your 65th birthday, includes your birthday month, and continues 3 months after your birthday month. Your coverage begins no earlier than the month of your birthday. For example, if your birthday occurs in March, your IEP begins December 1 and ends June 30 but your Medicare coverage begins no sooner than March, your birthday month.
During your Initial Enrollment Period, you can enroll in Medicare Part A and Part B. However, you will have the option to turn down Medicare Part B, which has a monthly premium. Most people receive Medicare Part A with no premium because they paid into Medicare via taxes while working for at least a minimum of 10 years.
SPECIAL ENROLLMENT PERIOD
You might qualify for a Special Enrollment Period (SEP) if you missed Medicare enrollment when you were first eligible, depending on your situation. A common reason you might get this Medicare enrollment period is if you were covered by an employer or union group health plan at the time you turned age 65. Your Special Enrollment Period, if you qualify, could be the 8 months following the month the employer or union group health plan coverage ends, or the employment ends, whichever occurs first.
If your employer-based coverage included creditable prescription drug coverage, then you may want to be aware of this point. To avoid a Medicare Part D late enrollment penalty, you generally have only 63 days after the loss of group health-care coverage if you want to enroll in a Medicare Advantage Prescription Drug plan or a stand-alone Medicare Part D prescription drug plan. Prescription drug coverage is optional.
GENERAL ENROLLMENT PERIOD
If you miss your Initial Enrollment Period, Medicare gives you another opportunity to enroll in Part A and/or Part B – the General Enrollment Period. The Medicare General Enrollment Period is from January 1 to March 31 each year. Coverage begins July 1 of the same year.
But have in mind that if you didn’t enroll in Medicare Part A and/or Part B during your IEP, and you do not qualify for a SEP, you might have to pay a late enrollment penalty.
ANNUAL ELECTION PERIOD
The Annual Election Period (AEP) occurs from October 15 to December 7 each year. This Medicare enrollment period is designed to allow people with Medicare to change their Medicare coverage. You can switch from Medicare Part A and Part B to a Medicare Advantage plan, switch from Medicare Advantage to Medicare Part A and Part B or switch from one Medicare Advantage plan to another. You can also enroll in or drop out of Medicare prescription drug coverage.
MEDICARE ADVANTAGE OPEN ENROLLMENT PERIOD
The Medicare Advantage Open Enrollment Period allows anyone enrolled in a Medicare Advantage plan on January 1 the opportunity to change plans. If you change your mind about your plan selection, you can change to another Medicare Advantage plan or switch to Medicare Part A and Part B during this open enrollment period. The MA OEP occurs between January 1 and March 31.
But be aware that you cannot sign up at this time for Medicare Advantage from Original Medicare. You are only allowed to change from one plan to another.
SPECIAL ENROLLMENT PERIODS FOR MEDICARE ADVANTAGE AND PART D
If you have a Medicare Advantage plan or a stand-alone Medicare Part D prescription drug plan, a Special Medicare Enrollment Period exists to allow you to change plans under some conditions:
- if you have moved out from your plan`s service area
- if you moved into or out of a nursing home
- if your plan no longer exists in your area
- if you receive Extra Help with your Medicare Part D
COSTS OF MEDICARE
Most people who qualify for Medicare do not pay for Part A, under one condition and that is if you or your spouse worked for at least 40 quarters (10 years) paying Medicare taxes.
If you don`t qualify, there are some cost rules for hospitalization that are important to know.
Inpatient hospitalization days 91 and higher are considered lifetime reserve days. You receive 60 lifetime reserve days to use throughout your life. If you go beyond these days, you are responsible for all costs after day 91.
The cost for days 1-60 of inpatient care is $0/per day. If you need to stay more than 60 days, then the costs are $389/per day for days 61-90 of inpatient care, and they are $778/per day from day 91 on.
Medicare Part B requires you to pay a monthly premium. Your costs if you enroll in Medicare Part B will include Part B monthly premium, coinsurance, and a yearly deductible.
The standard monthly fee for Part B is $170.10 in 2022. It is higher for recipients who have higher incomes.
The annual deductible for Part B is $233 in 2022. In addition, the patient pays 20% of the bill as a coinsurance payment.
There is a wide range of Medicare Advantage plans and their costs. Many people choose low-cost or free plans, and $0 Medicare Part C plans are available in 49 states. On the other side, some plans can cost several hundred dollars per month. Expensive plans usually provide better benefits such as a broader network of medical providers, more coverage for specialized care, or better cost-sharing benefits.
Medicare Part C costs are determined by several factors, such as premiums, deductibles, copayments, and coinsurance. These amounts can range from $0 to hundreds of dollars for monthly premiums and yearly deductibles, and they are different from insurance carrier to carrier. But most of your Part C costs will be determined by the chosen plan.
Here are some of the most common factors affecting Part C plan cost: Plan premium, Deductibles, Copayments and coinsurances, type of plan, out-of-pocket maximum, and finally, your lifestyle and your income.
Most people only pay their Part D premium. If you don’t sign up for Part D when you’re first eligible, you may have to pay a Part D late enrollment penalty.
If you have a higher income, you might pay more for your Medicare drug coverage. If your income is above a certain limit ($91,000 if you file individually or $182,000 if you’re married and file jointly), you will pay an extra amount in addition to your plan premium. You will also have to pay this extra amount if you are in a Medicare Advantage Plan that includes drug coverage. This doesn’t affect everyone, so most people won’t have to pay an extra amount.
The late enrollment penalty is an amount that is permanently added to your Medicare drug coverage (Part D) premium. You may have to pay a late enrollment penalty if, at any time after your Initial Enrollment Period is over, there’s a period of 63 or more days in a row when you don’t have Medicare drug coverage. Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($33.37 in 2022) times the number of full, uncovered months you didn’t have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium.