Medicare Parts


Original Medicare

“Original Medicare” refers to Medicare parts A and B. The federal government manages these plans, and you can receive care from any doctor, other health care provider, hospital, or other facility that accepts Medicare patients. Except during emergencies, it is important to ask the provider if they accept Medicare assignment before you obtain a service from them. If the provider does not accept Medicare, you may need to pay a much higher amount to receive their care.

Medicare Part A

Medicare Part A helps pay for inpatient hospital care and some other care, such as home health, hospice, and skilled nursing facility care.  Most people age 65 and over who are U.S citizens or permanent legal residents are eligible for Medicare Part A.  

Costs

Medicare Part A is free if you receive or are eligible to receive Social Security benefits. In other words, it is free if you or your spouse has worked and paid taxes for at least 40 quarters (10 years). 

If you are not eligible for premium-free Part A (do not have 10 years of work) you will have to pay a monthly premium for Medicare Part A. Depending in your income and assets, you may pay up to $458 each month in 2020. If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $252.

When should I enroll in Medicare Part A?

You can enroll in Medicare Part A during your 7-month Initial Enrollment Period between the three months before you turn 65 and the three months following. If you do not buy Part A during your Initial Enrollment Period when you are first eligible at 65 years of age, your monthly premium may cost 10 percent more once you do enroll. You will have to pay the higher premium for twice the number of years you were eligible for Part A, but did not enroll. For example, if you were eligible for Part A for 2 years but were not enrolled, you will have to pay the higher premium for 4 years. If you meet certain conditions that allow you to sign up for Part A during a Special Enrollment Period, you may not face the penalty.


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If you're under 65, you can get premium-free Part A if:

Is enrollment in Medicare Part A automatic or do I need to enroll?

If you are receiving some form of Social Security (Social Security or benefits from the Railroad Retirement Board) when you become eligible for Medicare (age 65,) you will be automatically enrolled in Part A and Part B.  If you are not receiving Social Security when you turn 65, you must enroll in Medicare through the Social Security Administration.  The application can be done online here, by phone at 800-772-1213, or in person at your local Social Security office.  The Social Security Administration has created a check list of the information you need to apply which you can download here. 

Medicare Part B

Medicare Part B is general health insurance coverage. Medicare Part B helps cover physician visits, outpatient services, preventative services, medical equipment, and some home health visits. Part B covers both medically necessary services and preventative services that help prevent illness or detect it at an early stage when treatment is most likely to work best.

Part B covers things like:

  • Clinical research
  • Ambulance services
  • Durable medical equipment (DME)
  • Mental health
  • Inpatient
  • Outpatient
  • Partial hospitalization
  • Getting a second opinion before surgery
  • Limited outpatient prescription drugs

The Affordable Care Act recently expanded the range of preventative services that Medicare Part B covers, such as mammograms and colonoscopies, and patients can receive a “Welcome to Medicare” preventative visit and a yearly “Wellness” visit with their provider.

Medicare Part B does not cover most prescription drugs, dental care, vision exams, hearing exams or aids, cosmetic surgery, acupuncture, or long-term care (also called custodial care).

Costs

Anyone who is eligible for Medicare Part A can also enroll in Medicare Part B. Most Part B benefits are subject to a yearly deductible ($198 in 2020), and out-of-pocket copayments, coinsurance and monthly premiums. The standard Part B premium for 2020 will be $144.60 (or higher depending on your income).

Some people who have income or resources higher than a set amount may need to pay higher Part B premiums as determined by Social Security. People with limited income and resources may be eligible to receive assistance with Part B payments through a variety of programs such as Medicaid.

If you have Original Medicare and you obtain a service to which the Part B deductible applies, you must pay the entire Medicare-approved amount for that service until your deductible is met. At that point, Medicare will pay about 80% of the cost of the service, and the coinsurance you will pay will be about 20%. If it applies to the specific service, you may also need to make a co-payment.

When should I enroll in Medicare Part B?

Similar to Part A, Medicare Part B has a penalty associated with enrolling outside of the Initial Enrollment Period when you first become eligible (the 7 month period around your 65th birthday). If you do not sign up for Medicare Part B during your Initial Enrollment Period, you will be charged a monthly premium of 10% of the Part B premium for every full 12 months you were eligible but did not enroll.

If you have employer based insurance when you turn 65, you may keep your plan and then need to enroll in Medicare Part B within 8 months of losing your employer plan to avoid paying a penalty.

Medicare Advantage Plans (Part C)

Unlike Original Medicare, which the federal government administers, private companies approved by Medicare offer Medicare Advantage Plans. HMO and PPO plans are common Part C plans. Once you have Parts A and B, you may choose to purchase a Part C plan as well because you may find they offer extra coverage that you want. Every Medicare Advantage Plan covers all of the benefits of Original Medicare except for hospice care and some care in clinical research studies. Most Part C plans include Part D prescription drug coverage, and many offer vision, hearing, and dental services that Original Medicare does not cover.   

Costs

Medicare Advantage Plans may have monthly premiums in addition to the Part B premium, but unlike Original Medicare, they have yearly limits on the amount that you can be required to pay out-of-pocket ($6,700 in 2018). Different Part C plans may have different deductibles, co-payments, and coinsurance policies that you should compare prior to choosing a plan. They also have different requirements on which doctors you can visit and which facilities you can go to for care.

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When should I enroll in Medicare Part C?

If you currently have insurance from an employer or union, it is important to contact their benefits administrator before you sign up for a Medicare Advantage Plan because doing so may cause you and your dependents or spouse to lose that coverage.

You can join a Medicare Advantage Plan during the 7-month Initial Enrollment Period beginning 3 months before you turn 65. If you get Medicare before you turn 65 due to a disability, you can enroll in a Medicare Advantage Plan during the 7-month period that begins 3 months before your 25th month of disability.

During the Open Enrollment Period of October 15 – December 7, anyone who has Medicare can join, switch, or drop a Medicare Advantage Plan. If you already have a Medicare Advantage Plan, you can drop that plan and switch to Original Medicare between January 1 and February 14. Under certain conditions, such as if you move out of your current plan’s service area, you have Medicaid, you qualify for Extra Help, or you live in an institution (such as a nursing home), you may be able to enroll in a Medicare Advantage Plan during another Special Enrollment Period.

One Special Enrollment Period that may be applicable to you is the 5-Star Special Enrollment Period. Medicare Advantage Plans are given an overall rating based on how good their care is, the results of their care, and member surveys. A 5-Star rating indicates that the plan provides excellent care. Between December 8, 2018 and November 30, 2019, you can switch to a Medicare Advantage Plan that has a 5-star overall rating. You can view the ratings of plans available in your area at Medicare.gov/find-a-plan. It is important to note that a Medicare Advantage Plan may earn a 5-Star rating and not provide Part D drug coverage. Therefore, you may lose prescription drug coverage if you switch from a plan that has drug coverage to a 5-Star Medicare Advantage Plan that does not. You should always carefully consider the coverage and costs of plans before deciding to switch.

Medicare Prescription Drug Plans (Part D)

Because Original Medicare does not cover most prescription drugs, you may wish to sign up for a Medicare Prescription Drug Plan (Part D) or a Medicare Advantage Plan to lower the cost of your prescription drugs. Similar to Part C plans and Medigap plans, private insurance companies run Part D plans.

Costs

Different Part D plans may have different formularies (lists of which drugs they cover), different premiums (which may be higher if you have a higher income), and different deductibles, copayments, and coinsurance amounts. Plans may also have agreements with pharmacies that set different prices for the same drugs at different locations. You may be able to get your prescriptions automatically refilled and sent to you in the mail. Your Part D plan may also include a Medication Therapy Management program that will help you and your doctors make sure that you are taking the best combination of medications for your health. Some Part D plans require prior authorization before you can fill certain prescriptions, and may have limits on the quantity of medications you can get at one time.

Most Part D plans have a coverage gap, or donut hole. This means that after you and your drug plan have paid a certain amount for covered drugs in a year, the percentage that you pay changes. Each plan has a set dollar amount that you can be required to pay out of pocket while in the coverage gap, and if you pay up to that amount, you are out of the coverage gap. At this point you enter what is called catastrophic coverage, and you pay only a small co-payment or coinsurance amount for covered drugs for the rest of that year.

When should I enroll in Medicare Part D?

If you have employer or union insurance, you should contact their benefits administrator prior to enrolling in a Part D plan because changing your drug coverage may affect your doctor and hospital coverage or affect the coverage of your dependents or spouse. You can sign up for Part D during your Initial Enrollment Period when you first become eligible for Medicare when you turn 65 or if you obtain Medicare as a result of a disability. If you do not enroll then and you wait to join Part D during the Open Enrollment Period (October 15 – December 7 each year), and you do not qualify for a Special Enrollment Period, you will likely pay a late enrollment penalty. If you have a Medicare Advantage Plan that includes prescription drug coverage and you sign up for Part D, you will be dis-enrolled from your Medicare Advantage Plan and re-enrolled in Original Medicare. If you have a Medicare Advantage Plan that does not include prescription drug coverage, you may enroll in a Part D plan and keep your Medicare Advantage Plan. Once you have Medicare Part D, you can choose to switch Part D plans during the Open Enrollment period of each year.

Medicare Supplement Insurance (Medigap)

If you have Medicare Parts A and B and you need help paying some of the health care costs that Original Medicare does not cover, such as co-payments, coinsurance, and other services or supplies, you may be eligible to purchase Medicare Supplement Insurance (Medigap) from a private company. Medicare will pay however much of the cost of your service that it covers, and then Medigap will pay its share. In some Medigap plans, a certain percentage of the cost of a health care service may be reserved for the patient to pay. In addition, some Medigap policies require monthly premiums, but different insurance companies may charge different premiums for the exact same coverage, so you should carefully compare Medigap plans before you choose one.

Medigap plans sold after January 1, 2020 do not cover the Part B deductible, meaning Plans C and F are not available after January 1, 2020. If you were already covered by Plans C or F before January 1, 2020, you'll be able to keep your plans. 

When should I enroll in Medigap?

Your Medigap Open Enrollment Period is the 6-month period that begins on the first day of the month in which you are 65 and you are enrolled in Part B. If you are not enrolled in Part B when you first turn 65, then your Medigap Open Enrollment Period does not begin until you obtain Part B. If you wait to enroll in Medigap until after your 6-month Medigap Open Enrollment Period is over, you may have limited Medigap options, and you may be required to pay higher fees. If you are enrolled in a Medicare Advantage Plan, it is illegal for anyone to enroll you in a Medigap policy unless you are switching back to Original Medicare. However, if you have a Medigap plan you may join a Medicare Advantage Plan, though you cannot use a Medigap plan to pay for Medicare Advantage Plan copayments, deductibles, or premiums as you may be able to for an Original Medicare plan.




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