Original Medicare, frequently just called Medicare, is made up of 4 Parts. But at any time you will only be using either Part A, Part B, and Part D OR you will be using Part C. Let's break down what each Part of Medicare covers below:
Hospital Stays: Medicare Part A covers inpatient care in hospitals. This includes critical access hospitals, inpatient rehabilitation facilities, and long-term care hospitals. It covers semi-private rooms, meals, general nursing, and drugs as part of your inpatient treatment, and other hospital services and supplies.
Skilled Nursing Facility (SNF) Care: If you meet certain conditions, Medicare Part A will cover care in a skilled nursing facility, but not long-term or custodial care. It typically covers semi-private rooms, meals, skilled nursing and rehabilitative services, and other services and supplies.
Hospice Care: If you have a terminal illness and are expected to live six months or less, Medicare Part A can cover hospice care. This includes services such as pain and symptom relief, social services, and bereavement counseling. Medications for symptom control and pain relief are also covered.
Home Health Care: While often associated with Medicare Part B, under specific conditions, Part A can cover home health services like intermittent skilled nursing care, physical therapy, speech-language pathology, and occupational therapy. However, it doesn't cover 24-hour home care, meals, or homemaker services if that's the only service needed.
Blood: If you need blood as an inpatient, Medicare Part A covers the blood you get in a hospital, after the first 3 pints.
Medicare Part A does have a deductible that applies for each medical event, but does allow some provisions for waiving the deductible in some instances if there are multiple hospital stays within 90 days. The deductible needs to be met before Medicare Part A starts paying benefits, but then you are covered for the 1st 60 days of a hospital stay. After the 60th day, you will be responsible for Part A copays and coinsurance.
Most of the time Part A doesn't cost you anything in terms of monthly premium as long as you have paid Medicare Taxes while working for at least 10 years (40 quarters).
Medicare Part B, also called "Medical Insurance," covers outpatient care, preventive services, and does have a premium. Medicare Part B provides these coverages:
Doctor Visits: Medicare Part B includes services from doctors and other healthcare providers, outpatient care, home health care, and preventive services.
Preventive Services: Medicare Part B emphasizes preventative care and covers services like flu shots, screenings for cancer, diabetes, and heart conditions, as well as annual wellness visits to develop personalized prevention plans.
Outpatient Procedures: If you need a surgery or procedure that doesn't require an overnight hospital stay, Part B steps in. This includes same-day surgeries, lab tests, X-rays, and mental health services.
Medical Equipment: Durable medical equipment (DME) such as wheelchairs, walkers, or oxygen equipment that's deemed medically necessary is covered under Part B.
Ambulance Services: Medicare Part B covers medically necessary ground and air ambulance transportation to a hospital or skilled nursing facility.
Mental Health: Beneficiaries have access to outpatient mental health services, including therapy, counseling, and psychiatric evaluations. It also covers partial hospitalization for those who require a structured outpatient setting.
Physical and Occupational Therapy: Therapy for post-surgery or injury, these therapeutic services get coverage when prescribed by a doctor.
Medicare Part B has an annual deductible that is adjusted every year by CMS (Centers for Medicare & Medicaid Services). There are instances where the Part B deductible has gone up from prior years and gone down from prior years. For example the 2022 Medicare Part B Deductible was $233. The deductible went down in 2023 to $226.
Once the deductible has been met, without a Medicare Supplement (Medigap Plan), Medicare Part B is generally considered a 80/20 coverage where you pay 20% and Medicare pays 80%.
Medicare Part B is not free for most people. Most people will pay the Standard Medicare Part B Premium unless they are considered a High Income Earner and have to pay IRMAA (Income Related Monthly Adjustment Amount) on top of the standard Part B Premium. In cases where someone is considered a low income earner, they may qualify for the Medicare Savings Program through their state and have the premium paid for them.
Medicare Part C is also called Medicare Advantage (MA or MAPD). It’s an alternative to Original Medicare.
Medicare Advantage Plans may, or may not, include prescription drug coverage, along with other extra benefits.
Medicare Advantage Plans are offered through private insurance companies, which means that the plans are not the same across the country. In fact, plans can vary drastically in counties throughout a state.
Medicare Advantage Plans are built on top of medical provider networks, such as Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), or let you see any provider that will work with the network under a Private Fee-For-Service (PFFS) plan.
The Plan Provider becomes your Primary Insurance provider and Original Medicare is no longer paying for your medical treatment. However, you are still required to pay your Medicare Part B Premiums.
Medicare Part D is also known as prescription drug coverage. Part D coverage is available as a stand alone plan (PDP) or as part of a Medicare Advantage Plan (Part C).
Prescription Drug Plans are offered by private insurance companies and because of this, no two plans are the same. Each plan has it's own formulary, or list of covered prescription drugs. The formulary is required to meet minimum standards by provider coverage for at least two prescriptions for each drug class.
The formulary is broken down into tiers, where medications that are Tier 1 are the least expensive and drugs in higher tiers are more expensive.
Commonly, a prescription drug plan is purchased when a Medicare Supplement (Medigap Plan) is being used to supplement Original Medicare.
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