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Hospital Stays
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Medicare is the federal health insurance program in the United States for individuals who are 65 or older. It also covers younger people who have specific disabilities or health conditions, such as End-Stage Renal Disease (ESRD) or Lou Gehrig’s disease (ALS).
While the basic definition seems straightforward, the Medicare program can be complex, and many beneficiaries remain confused long after enrollment. We're here to clear up the confusion for you today!
Medicare was established in 1965 when President Lyndon Johnson signed the Medicare and Medicaid Act into law. This act created Medicare to provide health insurance for retired individuals and also introduced Medicaid, which is sometimes confused with Medicare. Unlike Medicare, Medicaid is aimed at individuals with limited incomes rather than based on age.
The Medicare program includes four main parts, along with options for additional coverage. Everyone begins with Parts A and B, but the remaining coverage options will depend on your specific healthcare needs and budget.
How Does Medicare Work?
Let’s start talking in more detail about each part of Medicare and the supplement coverage offered to Medicare beneficiaries.
Original Medicare
Original Medicare, sometimes known as Traditional Medicare, consists of Part A and Part B. Everyone starts with Original Medicare, and you must enroll in both Parts A and B before selecting any additional coverage options.
Medicare Part A, also referred to as inpatient or hospital insurance, covers inpatient hospital stays, care in skilled nursing facilities, hospice care, and some home health care services.
Most people do not pay a premium for Part A, provided you or your spouse have worked and paid taxes for at least ten years (40 quarters). If this requirement isn't met, your premium will be based on the number of quarters you have worked, and premiums may increase annually.
Despite not having a premium, Part A does involve out-of-pocket costs, including a deductible that differs from other insurance deductibles. Instead of an annual fee, the deductible is applied per benefit period, which starts on the first day you’re admitted as an inpatient and ends after 60 consecutive days out of the hospital.
Part A also includes copayments for hospital stays, beginning on the 61st day of hospitalization after the first 60 days are covered by Medicare.
Medicare Part B, or outpatient or medical insurance, covers services such as doctor visits, imaging, lab tests, surgeries, durable medical equipment, and many preventive care services.
Part B requires a monthly premium, set annually by the Centers for Medicare and Medicaid Services (CMS). While most people pay the standard premium, those with higher incomes may pay more. Beneficiaries with limited incomes may qualify for Medicare Savings Programs to help with the Part B premium.
Part B also has a deductible, which is smaller and annual. After meeting this deductible, Part B covers 80% of eligible services, with you responsible for the remaining 20% coinsurance.
Unlike traditional group health insurance, Original Medicare does not have an out-of-pocket maximum, which means beneficiaries may face significant financial responsibilities despite the broad coverage provided.
To address Medicare’s out-of-pocket expenses, consider a Medicare Supplement plan, also known as a Medigap plan. These plans, offered by private insurance companies, serve as secondary coverage to help cover costs not fully paid by Medicare.
There are ten Medigap plans available, labeled with letters from A to N. Unlike Medicare's "parts," which cover different aspects of health care, Medigap "plans" provide additional coverage. It’s understandable why many find Medicare complex!
Medigap plans help cover the costs associated with Medicare Parts A and B, such as deductibles, copayments, and coinsurance. The extent of coverage depends on the specific Medigap plan you choose, with Plans F, G, and N being among the most popular options.
Premiums for Medicare Supplement plans vary based on the plan selected, the insurance provider, and personal factors such as age, gender, and location. New Medicare beneficiaries can generally expect to pay between $80 and $160 per month for a Medigap plan.
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Medicare Part D
Medicare Part D provides coverage for prescription drugs, as Original Medicare does not include this benefit. Even if you’re not currently taking medications, it’s important to enroll in a Part D plan to avoid lifelong financial penalties for late enrollment.
Part D plans are offered by private insurance companies and can differ depending on your location. To select the best Part D plan, you'll need to compare their drug formularies to ensure your prescriptions are covered at the lowest possible cost.
Medicare Advantage
Finally, let's discuss Medicare Advantage, also known as Medicare Part C. We saved this for last because it offers an alternative to the traditional Medicare options we've covered.
To enroll in a Medicare Advantage plan, you must first sign up for Original Medicare part A and B. Once becoming enrolled in your Advantage plan, your benefits are managed by a private insurance company rather than the federal government.
Medicare Advantage plans provide at least the same coverage as Original Medicare, but many offer additional benefits. For example, you can often include prescription drug coverage within your Medicare Advantage plan at no extra cost. Many plans also offer added benefits like hearing, vision, and dental care, as well as wellness programs, gym memberships, transportation, meal delivery, and monthly over-the-counter allowances.
If you're considering Medicare Advantage, it’s crucial to understand how these plans work and explore the various options available. Medicare Advantage plans come in different types, so working with an advisor can help you find the plan that best meets your needs.
One of the most appealing features of Medicare Advantage plans is their low premiums, with many plans available for as little as $0 per month. However, be sure to review the plan’s out-of-pocket costs, including deductibles and copayments.
You don’t have to struggle through the Medicare maze alone. The insurance agents at Simplified Benefits specialize in Medicare, and we are happy to help you learn more about it. We take the time to give you personalized, comprehensive advice so you can rest assured that you’ve got the best health insurance in place.
Our services are completely free, so call Simplified Benefits today to enroll in Medicare!
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Medicare Required Disclaimer:
Currently we represent 8 organizations which offer 46 products in Cache County Utah. You can always contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program (SHIP) for help with plan choices.
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