The ABCs of Medicare: An Overview of Your Benefits and Options

​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:

• You must pay a deductible of at least $1,556 as of 2022, for the first 60 days of hospitalization.
• If you stay longer than 60 days, you'll have to pay a copay of $389 per day for days 61 through 90.
• After 90 days, your copayment is $778 per day. Medicare covers costs over $788 for a maximum of 60 days over the course of your lifetime.
• Generally, Medicare Part A does not cover nursing home care except in specific and temporary circumstances. It is not appropriate for long-term custodial care needs such as assisted living facilities and skilled nursing homes.
• But here's a breakdown of what you pay under Medicare Part A if you are in a nursing home:
• Days 1-20: You pay nothing.
• Days 21-100: You pay $194.50 per day
• More than 100 days: You pay full cost and receive no Medicare benefit.

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.
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For more information, call us today, particularly if you are nearing your 65th birthday.