Medicare is a national medical insurance program primarily for senior citizens aged 65 or older who have paid into the Medicare insurance system during their working years. In some cases, individuals with certain medical conditions, such as end-stage kidney disease or amyotrophic lateral sclerosis (Lou Gehrig's disease) can qualify for benefits even before reaching age 65.
Before you become eligible for Medicare, it's a good idea to understand how it works, particularly if you've been on an employer-sponsored plan through your job.
Medicare has four major components:
Part A: Hospital Insurance
Hospital insurance pays for inpatient hospitalizations, tests and meals while you're in the hospital. It doesn't cover all costs. The coverage structure is as follows:
Part B: Medical Insurance
Medicare Part B covers doctors' bills, nursing services, laboratory fees, certain vaccinations, outpatient procedures, renal dialysis services, blood transfusions, some ambulance transportation, and certain other outpatient services. It also provides assistance in purchasing durable medical equipment such as wheelchairs and adaptive living technology, oxygen tanks, artificial limbs, eyeglasses (after eye surgery, for example), and the like.
Part B is voluntary, and there's a monthly Part B premium of $170.10 for most recipients in 2022. Higher income enrollees may pay more. There's also a $233 deductible per year, after which Part B pays 80% of the approved costs for covered goods and services. The patient pays 20%.
Part C: Medicare Advantage
Medicare Advantage is an optional system that lets you access your Medicare benefits via a private managed care plan. Different private insurers structure coverage in a variety of different ways, and consumers have the option to choose a plan with enrolled providers in their area that provides the right mix of benefits for them.
To enroll in Medicare Advantage, you must also be enrolled in both Part A and Part B. There is a premium for Medicare Advantage, which varies substantially by plan and provider. However, your Part C plan will normally provide coverage for a variety of services not covered under Parts A or B.
For example, while neither Part A or B will cover prescription drugs, you can enroll in a Medicare Advantage plan that has its own prescription drugs benefit. You may also receive coverage for other services like vision or dental care that Part A and B do not provide on their own.
Medicare Advantage is an alternative to Medicare Supplement insurance (or "Medigap" coverage). If you are enrolled in Part C, you do not need to buy Medicare Supplement insurance and vice versa.
Part D: Prescription Drugs
Part D covers prescription drugs, subject to a complex system of copays and deductibles. You can enroll in Part D if you are also enrolled in Part A and Part B.
Different insurers provide coverage for different specific drugs, so check your plan's formulary before you enroll in a given Part D plan. If you are enrolled in a Medicare Advantage Plan that includes a prescription drug benefit, you normally do not need to be enrolled in Part D, directly. However, Part D allows you to purchase prescription drug coverage directly without having to enroll in a Medicare Advantage plan.
Premiums for Part D vary with your income. Those with higher incomes may have to pay extra for Part D coverage.
Late enrollment fees may apply, so it's important to make enrollment decisions as soon as you're eligible, if possible.
For more information, call us today, particularly if you are nearing your 65th birthday.
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Dubuque, IA 52001
Phone: (563) 556-0272
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In February 2020, The Friedman Group joined AssuredPartners, the 11th largest insurance brokerage in the U.S. This partnership provides us access to additional capital and a national footprint that enables us to continue to negotiate the most favorable coverage terms and conditions for our clients, and allows us to provide an even broader spectrum of risk management support services.