Medicare is notorious for its alphabet soup. Luckily, we’re here to help clear that up for you. We’ll go over each part to help you understand what it covers and what it costs.
Part A is your hospital coverage. This would be your in-patient admittance costs for a hospital or other facility. Think of it as your “rent” so to speak to stay in these facilities.
- Inpatient hospital stays – Once you are admitted, Part A kicks in to cover your hospital stay.
- Skilled nursing facilities – It is important to understand that this is not a nursing home. This is specifically meant to mean a facility where you are getting better. Think rehab. You are admitted, you’re there for a short amount of time, and you get out and go on living.
- Hospice care – This is end-of-life care
- Home health care – Under Part A coverage, home health care refers to care received in your home to get you back to being whole. This is not the same as long term care assistance within the home.
For most people, Part A does not cost anything. If you or your spouse worked for 40 quarters or more throughout your life and contributed to the system through your taxes, you qualify for Part A at not cost.
- $0 – You (or your spouse) worked for 40+ quarters
- $252 per month* – you (or your spouse) worked for 30-39 quarters
- $458 per month* – you (or your spouse) worked less than 30 quarters
*2021 numbers – These amounts adjust each year
$1,484 per benefit period
The Part A benefit period begins the day you are admitted as an inpatient hospital stay. The benefit period ends when you haven’t received any inpatient hospital care for 60 days in a row.
There are other gaps for which you would be responsible under Part A. Give us a call for more details around Part A coverage gaps and how to protect yourself against them.
Part B is your medical coverage. This would include the charges from your doctors, both inpatient and outpatient, your outpatient care, labs, tests, x-rays, and others listed below.
- Doctor services (inpatient/outpatient) – Any bills from your doctors themselves, not the facilities, would fall under Part B coverage.
- Outpatient care – This is care you receive when you haven’t been formally admitted to a hospital. This includes Emergency Room visits, observation services, outpatient clinic services, and same-day surgery.
- Labs & X-rays – Your labs, x-rays, and tests are covered under Part B.
- Therapy – Physical, occupational, and chemotherapy are examples of the therapies covered under Part B.
For most people, Part B costs $148.50 per month for 2021.
Costs may be higher for those with higher incomes. Check out the income levels and cost adjustments here: Part B Premium Amounts
$203 per year (2021)
The Part B deductible is less complicated than the Part A deductible. Your Part B deductible is an annual deductible, meaning you are responsible for the first $203 before Medicare steps in and starts to cover expenses.
After you have met your Part B deductible, Medicare covers 80% of Medicare-approved charges under Part B. The remaining 20% of those charges are your responsibility. Unlike your traditional health insurance coverage through an employer, as an example, under Medicare, there is no maximum on that 20%.
So, if you were to have a $100,000 claim, Medicare would cover $80,000 and you would be responsible for the remaining $20,000.
We have a whole article on how to fill the various gaps in Medicare, including how to protect yourself against this unlimited 20% number. Check out that article here: Medicare Gaps and How to Fill Them
PRIVATE INSURANCE COMPANIES
What is it?
Part C, most commonly known as Medicare Advantage plans, are a combination of benefits in one package. These plans are offered by private insurance companies and replace your Medicare coverage by the government.
This means that when you use the healthcare system, you present your single Medicare Advantage card from the insurance carrier you choose and you do not present your Medicare card.
Note: This does not mean you should get rid of your Medicare card. Keep that in a safe place.
- Hospital Coverage – Replaces your Part A coverage.
- Medical Coverage – Replaces your Part B coverage.
- Prescription Drug Coverage – Replaces your Part D coverage (we will address this further down in this article).
Medicare Advantage plans often include extras like:
- Dental coverage
- Basic vision coverage
- Hearing benefits
- Gym membership reimbursement
- Transportation to/from doctor appointments
- Meals while receiving care
Medicare Advantage plan costs are determined by the insurance company you choose to use for coverage.
Premiums range from company to company. Premiums are also dependent on where you live because Medicare Advantage plans are built around specific zip codes. Several carriers have plans have $0 premiums in certain regions while others have higher monthly rates.
Expect between $0 – $100 per month.
Medicare Advantage plans are confined to the specific network approved by the insurance company you choose to use. This means that if you use a doctor outside of the carrier’s approved network, you would be responsible for paying more or all of the cost associated with that visit or treatment.
Wrapping up Part C:
Part C, aka Medicare Advantage plans, are a combination of several individual benefits wrapped nicely into one package. This package is built and managed by private insurance companies, among whom you can choose to use for these benefits.
Prescription Drug Coverage
What is it?
Part D covers prescription drugs and helps save money on the medications you take to stay healthy.
The national average is $43.07 per month. Much like Medicare Advantage plans, premiums vary from company to company and are dependent on the medications you take and where you live. Part D plans are generally the same statewide. Several carriers have low-cost plans around $10-$20 per month, while other plans have higher monthly premiums. Expect between $10 – $100 per month.
Much like Part B coverage, Part D premiums may be adjusted higher for those with higher incomes.
Part D is notoriously complicated, which is why we have an entire article and video devoted to Part D coverage.
Wrapping it up
Medicare parts are separated into two different sections: Government-run (Parts A & B) and Private Insurance Company-run (Parts C & D).
What makes Medicare confusing is that each letter of coverage works differently than the others. Each comes with it’s own quirks, exceptions, and problems, which is why we highly recommend speaking with an expert about your situation.
We realize we are biased when we say this, but it is important to understand that all of our services are available to you at no cost. Give us a call with any questions that come up when you have them and we can work through this together.