If you’re new to Medicare, you should get to know your coverage, costs, and plan options. Fortunately, Malhotra & Assoc. Insurance can help you in that process! We give our clients the knowledge and resources they need to make empowered decisions regarding their insurance options.
Medicare Coverage
Original Medicare is made up of Part A and Part B. Medicare Part A is hospital insurance and covers inpatient care in a hospital, temporary care in a skilled nursing facility, hospice care, and home health care. Medicare Part B is medical insurance and covers medically necessary and preventive care. This coverage includes outpatient office visits and things like clinical research, durable medical equipment, ambulance service, mental health care, and limited outpatient prescription drugs.
You should know what is not covered under Original Medicare: routine dental, hearing, or vision care, acupuncture, chiropractic care, routine podiatry, or cosmetic surgery. If you want coverage for these services, you may want to purchase a separate insurance policy.
Medicare Costs
Your costs for Medicare include premiums, deductibles, copayments, and coinsurance.
Part A premiums vary widely based on the number of work credits you or your spouse have. These work credits are based on your annual earnings and calculated by Social Security each year, with a maximum of four each year. If you or your spouse earned at least 40 work credits over your lifetime, you will receive Part A premium-free. You may also have premium-free Part A if you qualify due to a few other circumstances. If you earned between 30 and 39 credits, you will pay $259 each month in 2021. If you earned fewer than 30 work credits, you owe $471 each month in 2021.
Part B premiums start at $148.50 in 2021. The higher your income, the more you may have to pay each month for Part B.
Part A deductibles are $1,484 in 2021 and are charged for each benefit period. A benefit period starts when you are an inpatient and ends when you have not received inpatient care for 60 days.
Part B has a yearly deductible of $203 in 2021.
Once you have paid your deductible, you will need to pay copayments. Part B copayments are charged for your office visits, outpatient treatments, tests, items, procedures, and other covered services. You will pay 20% of the Medicare-approved amount for covered services as copayment. The Medicare-approved amount is standardized and will be much lower than what you might see on a hospital bill.
Part A hospital costs include a daily coinsurance once you have spent a certain number of days as an inpatient. These are charged for each benefit period. After day 60 spent as a hospital or mental health facility inpatient, you owe a daily coinsurance of $371. After day 90, you owe a daily coinsurance of $742 until you have used up your 60 lifetime reserve days. Once you have used those, you owe all costs for each remaining day of that benefit period. As an inpatient in a skilled nursing facility, you owe $185.50 for days 20 through 100, then all costs for each remaining day of that benefit period.
Medicare Plan Options
Beyond Medicare, you have Medicare Advantage plans, Medicare Part D, and Medicare Supplement Plans.
Medicare Advantage plans have the same Part A and Part B coverage but are offered by a private Medicare-approved health insurance company. You may be able to purchase a plan with prescription drug coverage, dental, hearing, or vision care, fitness club memberships, and more.
Part D prescription drug plans lower the cost of your prescriptions. You pay monthly premiums and a deductible, then only small copayments for each prescription based on if the covered drug is generic, brand-name, or specialty and whether or not it is preferred.
Medicare Supplements, also known as Medigap, do not cover healthcare services but instead help pay for the out-of-pocket costs from Medicare Part A and Part B. These costs can include Part A hospital costs and coinsurance, Part B copayments, the Part A deductible, skilled nursing care, hospice care, your first three pints of blood, Part B excess charges, and foreign travel emergency care.
You can have a Medicare Advantage plan or a Medicare Supplement, but not both.
To find out more about Medicare, its coverage, costs, and your plan options, contact Malhotra and Assoc. Insurance today.
