What’s the next step? You are turning 65 and approaching eligibility for Medicare enrollment and now you need to know what happens next. At CA Medicare, we’ve taken the time to provide you a basic overview of Medicare enrollment.

Medicare Parts A, B, C, and D: What They Cover – Medicare Parts A (Hospital) and B (Medical) are referred to as “Original Medicare.”

Medicare Advantage plans are referred to as Medicare Part C. These are private plans that people can purchase in place of Original Medicare. Most Medicare Advantage plans (Part C) also cover drugs.

Those who choose Original Medicare (Parts A and B) will need to purchase a drug plan (Part D) if they want prescription drug coverage.

Let’s explore Medicare Parts A through D in more detail.

Medicare Part A Covers:
• Inpatient hospital care
• Home health care
• Skilled nursing facility care
• Nursing home care
• Hospice

Most people don’t pay a monthly premium for Medicare Part A. There is a $1,340 deductible for each benefit period (2018) as well as a variable coinsurance rate over time that maxes out at $670 (2018). There is no annual out-of- pocket maximum with Original Medicare, which means that you continue to pay for a portion of services as you use them.

Original Medicare covers up to 90 days in a hospital, per benefit period, as well as an additional 60-day lifetime reserve. While the 60-day lifetime reserve can only be used once in a lifetime, it does not have to be applied toward the same hospital stay. Once your Lifetime Reserve is exhausted Medicare has No Hospital Coverage. Medicare Part B covers outpatient care, such as doctor visits, laboratory tests, and preventive health care services like vaccines and cancer screenings.

Part B also covers:
• Ambulance services
• Limited outpatient drugs
• Durable medical equipment (such as blood sugar monitors, orthotics, and artificial limbs)
• Mental health (inpatient, outpatient, partial hospitalization)
• Second opinion before surgery

The monthly premium for Part B coverage is $134 for most people. Individuals who filed a tax return with an annual income of $85,000 or more, will play a higher monthly premium.

As a general rule, Medicare Part B pays 80% of allowable charges after a $183 deductible, and the beneficiary is responsible for the remaining 20% (referred to as “coinsurance”) if their provider accepts Medicare assignment. For non-participating providers, the patient may have to pay up to 15% of the charges in addition to the 20% coinsurance rate

Medicare Part C (Medicare Advantage) Medicare Advantage plans are similar to private HMO plans you can buy on the market, and can be purchased/selected in addition to Original Medicare (Parts A and B). Medicare Advantage plans become primary to Original Medicare and are required to cover everything that Original Medicare covers, except hospice care, which is covered by Original Medicare even if you’re in a Medicare Advantage plan.

Some Medicare Advantage plans offer additional coverages, such as dental, hearing, vision, and/or health and wellness programs.

Those who choose a Medicare Advantage plan will pay the Part B premium and may also have an additional monthly premium for the Medicare Advantage plan; however, some Medicare Advantage plans come with no additional premium.

Why Choose a Medicare Advantage Plan over Original Medicare?

The short answer is that some people may fare better with a Medicare Advantage plan. For example, those who want to cap their out-of-pocket spending may benefit from a Medicare Advantage plan, which, by law, have an annual out-of-pocket maximum of no more than $6,700 per year. Original Medicare, by contrast, has no annual out-of-pocket maximum, as mentioned earlier.

It’s important to consult with an expert to thoroughly cover all your options when deciding between a Medicare Advantage plan and Original Medicare.

Medicare Part D: Drug Coverage

Medicare Parts A and B generally do not cover drugs. That’s why Medicare Part D was established in 2003. There are two ways to get drug coverage:

1. Through a Medicare Prescription Drug Plan (sometimes called a “PDP”), which adds drug coverage to Original Medicare.
2. Through a Medicare Advantage Plan with prescription drug coverage (sometimes called an “MA-PD.”

The costs for drug plans range anywhere from $15 and up, and each plan has its own list of covered drugs (formulary). The drugs are tiered from low to high, and drugs in lower tiers are less expensive than those in higher tiers. It’s important to make sure any drugs you are taking are covered before you choose a drug plan.

Medigap Plans

In addition to Medicare Parts A through D, there are Medicare supplement plans (also known as Medicare gap insurance, or “Medigap”) that can help cover some of the costs not covered by Original Medicare, such as copayments, deductibles, and coinsurance. Talk to a licensed insurance agent to learn more about Medigap plans and what they cover.

Consult with an Expert

This has been a basic overview of Medicare. There is much more to know, including what to expect in terms of copayments, deductibles, coinsurance, and more. Call the experts at Benefit Packages to thoroughly review your options and for help making the important decision about which plan(s) best meet your needs.