New to Medicare
We understand the stress around uncertainty of healthcare coverage, especially as you leave your employer insurance. Our independent agents are here to make this transition as smooth as possible.
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Medicare – How Does It Work and What Does it Cover?
Medicare is a federal insurance program that’s available for people over the age of 65, people with certain disabilities, people with End-Stage Renal Disease, and people with ALS – Lou Gehrig’s Disease. Medicare is a widely used insurance in the United States with over 60 million enrollees. There are several parts of Medicare that are used to cover various needs and we’ll walk you through them below.
Although there are many plans that cover your health needs through Medicare, there are some daily needs that are left as out-of-pocket expenses. These include dentures, hearing aids, long-term care, massage therapy, non-emergency medical care outside of the U.S., plastic and/or cosmetic surgery, and routine care for dental and vision.
Medicare Part A
Medicare Part A is designed to cover the costs of inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Although Part A Medicare can cover the cost of your semi-private room during your hospital stay, this may not cover all of your treatments while admitted as these may fall under Part B.
For most people over the age of 65, their cost for Medicare Part A will be $0 so long as they (or their spouse) paid Medicare taxes during their working years (generally for at least 10 years). This plan can also be referred to as premium-free Part A. If you’re not qualified for premium-free Part A, you may be eligible to buy into the coverage but these rates will vary on the duration of Medicare taxes paid.
Medicare Part B
Medicare Part B is to cover your outpatient services – essentially medical needs outside of the inpatient hospital environment. Generally, Part B covers medically necessary services (services or supplies needed to diagnose or treat your medical condition) and preventive services (e.g. doctor visits). Some examples include mental health, clinical research, ambulance services, durable medical equipment (DME), and limited outpatient prescription drugs.
Unlike the premium-free Part A coverage, there is a cost associated with Part B that’s regulated by Social Security and updates year-to-year. Similar to ACA (Affordable Care Act), the cost that an enrollee would pay is directly tied to their income bracket (the more you make, the more you pay).
Medicare Part C
Medicare Part C coverage is more notably known as the Medicare Advantage Plan or private insurance. This insurance is actually offered by private, third-party companies (e.g. United Health Care, Humana, Aetna) and not the United States government.
In order to be enrolled in Part C, you must already be enrolled in both Part A and Part B Medicare as this will ensure you have coverage for both hospital and medical needs (as noted above). Medicare Advantage Plans may offer additional coverage including dental, hearing, vision, and/or health and wellness programs. In many situations, these Advantage Plans will also include prescription drug coverage (found in Part D). Once you’re enrolled in an Advantage Plan, your coverage will come from the third-party insurance company, not from the government.
Medicare pays a fixed amount for your care each month to the companies offering Medicare Advantage Plans. These Advantage Plans vary with the out-of-pocket costs, co-pays, and deductibles, as well as how you can receive services.
Medicare Part D
Medicare Part D coverage is designed to cover most outpatient prescription drugs. Part D is offered through third-party insurance companies and can be purchased as a stand-alone product or included in your Medicare Advantage Plan. This type of coverage is required to all available to receive it and it can vary based on the state in which you reside
Each Part D Plan has a list of covered drugs (called formulary) and if your drug is not on this list, you can request an exception or appeal – otherwise, you’ll pay out-of-pocket. The drug categories in Part D are broken down into similar symptoms or having similar effects to the body. The Part D Plans must have at least two drugs from most categories but also cover all drugs available in the following categories: antidepressants, antipsychotics, anticonvulsive, anticancer, HIV/AIDs, and immunosuppressant drugs. Most vaccinations are also covered under Plan D except for vaccines that are covered under Plan B.
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