Medicare Basics

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What is Medicare

The Medicare trust was enacted by Congress in 1965. If you have a Medicare card with Part A and Part B, then you have original Medicare. However, you are responsible for yearly deductibles for Part A and Part B, co-pays and 20% of all health care costs.

 

Most Advantage health plans pay for yearly deductibles. All Supplemental plans have riders that you can add to the policy to cover deductibles.

 

Part A covers anything that happens inside a Hospital. Part A is at no cost to you because you have already paid into the plan during your working life.


Part A has a $1,364 deductible for hospitalization and a $341 per day co-pay for days 61-90. Additionally, it has a $170.50 per day co-pay for days 21-100 for skilled nursing.

 
Part B covers anything that happens outside the Hospital. Part B has a monthly premium that is deducted from you Social Security check. 


Part B has a yearly deductible of $185 per year and co-pays. The monthly premium is $135.50 per month for joint-filing of less than $170,000 income per year. High income earners will pay a higher premium.

 
Part C is your Medicare Advantage or Supplemental policy. 

To qualify, you must be a US citizen or permanent legal resident who has resided in the United States for five continuous years and be age 65 or have been on Social Security disability for longer than two years. 

 

Part D is your prescription medication policy. Prescription drugs are not covered in original Medicare. Part D is optional and if can choose to not have it but there is a penalty. 

Part D has a yearly $315 deductible. The deductible is Tier based and many prescription plans wave the deductible for Tier I and Tier 2.

What does Part A cover

Part A covers inpatient hospital care and services, skilled nursing facility care, home health care and hospice care.


In 2018 the Hospital deductible is $1,340 (per benefit period) and covers days 1-60 then  days 61-90 you pay $335 per day then days 91-150 you pay $670 per day. 


Skilled nursing is covered up to 100 days after a 3-day (admitted) hospital stay and they pay for days 1-20 then on days 21-100 you pay $167.50 per day. 


Medicare (approved) home health care is covered in full and hospice care is covered provided it’s in a Medicare-certified facility.   

What does Part B cover

The premium for Part B for 2016 is $183 unless you’re a high-income earner then the premium can go as high as $428.60 per month.


Once the deductible is paid, you are responsible for 20% of all medical costs and Medicare is responsible for 80% for most covered services.


Outpatient care, doctor services, hospital or clinic care, office and home visits, diagnostic X-rays, lab tests, radiation therapy, medical supplies and services, durable medical equipment, outpatient diagnosis or treatment services, ambulance transportation, outpatient rehabilitation (physical, speech and occupational therapy), home health visits (when ordered by a doctor), and ambulatory surgical centers are covered.


Your annual preventive care (physical) is at no cost. Certain cancer screenings, immunizations and flu shots are covered if approved by Medicare.  

What does Part C cover

  • A Medicare Supplemental policy, also called Medigap, helps pay for some of the “gaps” that Medicare doesn’t cover. Some Supplemental polices pay for deductibles. Plans are guaranteed renewable and benefits do not change each year and some plans allow you to relocate out of Minnesota and keep your plan.  You can change your plan to an Advantage plan and return to a supplemental plan as long as it’s done within 12 months without providing health history. 


  • A Medicare policy can be either a Cost Plan (ending in 2019) or an Advantage plan. It pays all of the original Medicare deductibles and 20% that you would have been responsible for. These plans help pay for expenses Medicare doesn’t cover and premiums vary based on the plan selected. Some plans have cost sharing (co-pays) and benefits and/or premiums may change each year.  Plans offer different networks, pharmacies and benefits.