Medicare A, B, C, & D

Medicare A, B, C, & D

Medicare is complex.  This comes as no surprise to virtually anyone that has tried to understand and navigate the intricacies of the program.  In this article, we’ll discuss what each part of Medicare is intended to cover.  We’ll focus on “traditional Medicare” or “original Medicare” as opposed to Medicare Advantage Plans to be covered later.  In future articles, we’ll get into more detail of each part, but for now, we’ll just provide a summary overview.  Let’s get to it.

Part A:

Hospital Insurance – this free (for most people) coverage covers much of the cost of inpatient care, whether that care is provided in a hospital or skilled nursing facility.  It can also cover some of the costs of home health care.  It does not, however, pay for extended long term care.

Most automatically receive Part A free of charge, but some will have to pay a monthly fee.  NOTE: Part A will only pay for inpatient care if the patient is actually admitted to the hospital.  If the patient is being held for observation, it’s likely being billed under a part B coverage and Part D coverage and therefore the copayments and deductibles will be much higher.  So, if the stay is exceeding 24 hours, ensure that you or your loved one is admitted.

Part B:

Medical Insurance – this covers most doctors’ services and other costs such as laboratory tests, clinic and clinical tests, home health therapy and other care whether in or out of the hospital.  It also covers outpatient services provided by other staff such as nurses, nurse practitioners, surgical assistants and X-ray technicians.

It will also cover ambulance transport if it would not have been medically advisable to travel any other way.

Everyone enrolled in Part B must pay a monthly premium.  This premium is increased each year on January 1 and premiums are tiered based on your Adjusted Gross Income from two years prior.  The lowest premium for 2017 is currently $134 per month per person.

If in the prior two years, you have become widowed, divorced, or had a large drop in income because of retirement or reduced work, you can contact Medicare to request an adjustment to your premium.

Part B coverage is rarely sufficient and will likely need to be supplemented.  While Part B is intended to pay for portions of doctor bills, outpatient hospital and clinic charges, lab work, and other items, there are often heavy restrictions to what’s covered and how much is paid.  Part B generally pays 80% of approved Medicare charges, with the insured responsible for the other 20%.

Due to that fact, many people seek out a private Medicare supplemental insurance, also known as Medigap insurance or utilize a Medicare Advantage Plan.  If a private supplemental policy is not affordable, you may be eligible for Medicaid.

Part C:

Medicare Advantage Plans – this is a type of policy that can replace parts A and B above.

Part D:

Prescription Drug Plan – private insurance companies offer Part D coverage.  While Medicare operates the program itself, you must enroll directly with the insurance company of choice.

These plans cover some, but not all, prescription drugs in all categories of medication.  Each plan has a specific list of drugs that are covered, known as a formulary.

Premiums generally range from $0 – $65 per month.  Once the deductible is met, the insurer generally covers 75% of the cost, and the insured covers 25%.  A unique aspect of Part D is that it has a coverage gap, aka “donut hole”, where the insured is responsible for all costs until you reach a catastrophic amount.  See here for a great article on the “donut hole” (Note: This link is to a private site called Medicare dot com rather than the Medicare dot gov website).

Each one of these areas could be a book unto itself.  The Medicare.gov website has a wealth of information about the topic if you can find what you’re looking for.

 

 

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