Some retiring seniors may be a little confused about what exactly Medicare covers. They are certainly not alone. Navigating the ins and outs of Medicare can be a complicated process. Medicare Parts A, B, and D all cover completely different medical expenses. And Medicare Part C may be even more difficult to understand, as it’s sold through private insurers.
Some people prefer to hire the help of an expert in order to explain all of these complicated processes. It also helps to do your own research, so that you have an idea of what to be prepared for. Certain health insurance companies might give you false or misleading information just to make it easier for them to get your business. As an informed consumer, it is a very good idea for you to find out what you can expect from the federal Medicare program before you talk to such people. this helps you figure out whether you will require a Medigap supplement, a Medicare Part C health insurance plan, or a health insurance alternative in order to meet your medical needs well into your golden years.
- Medicare Part A covers hospital and inpatient expenses, including nursing facility and hospice care.
- Medicare Part B covers outpatient expenses, such as preventative services and ambulance services.
- Prescription drug coverage is offered exclusively through Part D plans.
- Medicare Part C (Medicare Advantage) is supplemental insurance that covers gaps in Original Medicare, such as dental, vision, and hearing services.
- Private companies offer Medicare supplemental insurance plans instead of the federal government.
Medicare Part A: Hospital expenses
The vast majority of coverage benefits available under Medicare Part A will pay for certain medical costs in the event that you require hospitalization. Furthermore, there are some expenses outside of the hospital that fall under the umbrella of Medicare Part A.
Medicare Part A does not require you to pay a monthly premium if you have worked for at least 10 consecutive years (40 calendar quarters) and paid into Social Security throughout. Unfortunately, if you do not meet these qualifications, you may have to pay a premium for your Part A coverage. Starting in 2018, seniors who only paid social security for 29 quarters or less will be charged a monthly premium of $422. Those in the mid-range – with 30 to 39 consecutive quarters worked – will only be charged a premium of $232. Whether you have to pay a premium or whether you get Part A for free, you can expect the following benefits:
- Hospital Expenses. If you must go to the hospital, then Medicare Part A will cover your expenses up to a certain number of days. Past a certain point, you may be required to pay a coinsurance payment for a longer stay.
- Skilled Nursing Facility Care. If you need to live in a skilled nursing facility, Part A will cover basic services including (but not limited to) a semi-private room, skilled nursing care, meals, and medications. However, it will not cover any services that are deemed medically unnecessary for your health care goals.
- Hospice care. This type of medical care is usually given in your home unless your condition merits living in an inpatient hospice facility. Typical benefits include (but again, are not limited to) nursing care, medical equipment and supplies, prescription drugs, and doctor services.
Whenever you sit down and attempt to estimate your Medicare Part A costs, it’s important to get in touch with your doctor and get their feedback on what your medical needs will be. You can also ask him or her for feedback on how much such care will cost you so that you can make the appropriate financial arrangements.
Medicare Part B: Outpatient Expenses
What Medicare Part A does not cover, Medicare Part B usually does (with the exception of prescription drug costs). The two types of services that Part B specializes in include preventative services and medically necessary services or procedures. Federal laws are designed to make sure Part B provides the following benefits, although state laws may have certain variations on this list. It’s good to have a conversation with your doctor about what Part B covers for you with regard to your medical needs.
- Ambulance services
- Clinical research
- Inpatient and outpatient Mental Health
- Durable medical equipment
- Second opinions regarding surgical recommendations
- A limited list of outpatient prescription drugs
Part B premiums start at a flat rate of $134 per month, but it scales up depending on your income. This is based on your most recent tax return, and whether or not you file separately or jointly with your spouse. These income brackets change on a regular basis, so it’s important to stay on top of the changing rules and regulations from year to year.
Coverage Gaps in Medicare Parts A & B
There are certain services that you will pay for completely out of pocket, no matter how much you pay on your medicare premiums. These Services include:
- Dental Care
- Eye exams
- Custodial care
- Hearing aids and exams
- Routine foot-care
- Cosmetic surgery
Most benefits on this list are associated with elective medical care that has no scientific evidence to support its medical efficacy. However, there may be exceptions. You should discuss those options with your doctor to find out if a procedure you need or want could be covered by Medicare Parts A or B.
Medicare Part C
Medicare Part C is an entirely different insurance structure compared to Parts A and B. Technically, Medicare Part C is not managed or paid for by the government. If you choose a Medicare Part C plan, you are effectively purchasing regular health insurance coverage from a private provider. Your coverage under a Part C policy must equal what you would get from an Original Medicare policy. In some cases, you can purchase extra coverage that makes it easier and more affordable to meet your medical needs. But figuring out whether Original Medicare or Medicare Part C is better for you can be a pretty complicated process.
Medicare Part D: Prescription Drugs
Medicare Part D has one very important thing in common with Part C: they’re both managed by private insurance companies. These companies have contracts with the federal government, and they do share some of the expenses, but the federal government does not manage the program directly.
Medicare Part D coverage requires you to pay a premium, a yearly deductible, coinsurance payments, any coverage gap costs, Extra Help fees, and a late enrollment penalty (if you do not enroll during the regular enrollment period). These costs will vary greatly from person to person based on a variety of factors. It’s best to have a conversation with all parties involved – including your doctor, the company who is managing your drug plan, and any other entities that are involved in your outpatient prescription drug care. This will help you purchase the most comprehensive plan at the most affordable price.
So far, we’ve covered the bare-bone basics of what you should expect from your Medicare coverage benefits. We’ve also given a few common examples of the services it will pay for. But everyone has unique medical needs, and it can be hard to determine whether the services, prescriptions, and equipment you require will be covered by Parts A, B, and D. If you’re still a little uncertain, take a look at our sidebar to the left. We have several, in-depth articles discussing specific topics that will likely be relevant to your personal interests.