Medicare is medical insurance provided by the US Government for individuals who are 65 and older or with certain disabilities.
Original Medicare consists of two parts, Part A and B.
Part A is Hospital Insurance. Why is part A free? For the majority Part A is free if you have at least 10 years or 40 calendar quarters of work in any job where you paid Social Security taxes in the U.S. Medicare Part A helps cover inpatient care in hospitals and skilled nursing facilities (not custodial or long-term care), hospice and home healthcare services.
Part B covers Doctor and medical services. Medicare Part B cost for 2023 starts at $164.90 (https://www.cms.gov/newsroom/fact-sheets/2023-medicare-parts-b-premiums-and-deductibles-2023-medicare-part-d-income-related-monthly). In 2021 the monthly premium for Part B is generally $148.50, for others $207.90 or $297.00 or $386.10 or $475.20 or $504.90. Why do some pay up to $504.90 a month for Part B? If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount (for more details go to www.medicare.gov).
Should you get Part B? If your refuse to enroll in Medicare Part B at age 65 and later change your mind, you may pay 10% higher premium for each year you were not enrolled in Part B. Usually, you don’t pay a late enrollment penalty if you meet certain conditions (for more details go to www.medicare.gov).
Medicare does not pay 100%
Medicare will only pay 80% of the Medicare approved amount for covered services. You are responsible for paying the 20% not covered by Medicare.
How to pay the 20% not covered by Medicare?
Basically you have 2 options to pay your 20% responsibility.
Medicare Supplement (Medigap) – Medicare Supplement plan helps you pay the 20% not covered by Medicare. Medicare Supplement plans are sold by private insurance companies. You pay the private insurance company a monthly premium for your Medigap policy in addition to the monthly Part B premium that you pay to Medicare.
ALL Medicare Supplement (Medigap) plans are STANDARDIZED, the only difference is what each company that offers them charge consumers for the plan.
Medicare Supplement policies generally don’t cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.
If your Medicare started in 2019 or earlier, you have the option to purchase Plan F which covers 100% the 20% that Original Medicare Part A & B does not cover.
If your Medicare started in 2020 or 2021, you don’t have access to plan F.
Drug Coverage (Part D) – To get Medicare drug coverage, you must purchase a plan sold by an insurance company or other private company approved by Medicare. Each plan can vary in cost and drugs covered. If you decide not to get Medicare drug coverage when you’re first eligible, you’ll likely pay a late enrollment penalty unless your have creditable prescription drug coverage.
Option 2 to help you pay the 20% not covered by Medicare
Medicare Advantage (Part C) – Medicare Advantage plans are offered by private companies that contracts with Medicare. Medicare Advantage Plans provide all of your Part A (Hospital) and Part B (Doctor and Medical Services) benefits and most include Part D (Drug Coverage) plus extra benefits.
How do Medicare Advantage plans work?
Medicare pays a fixed amount for your care each month to the private companies contracted with Medicare. These companies must follow rules set by Medicare.
Extras offered by Medicare Advantage plans
Most Medicare Advantage plans offer extra benefits that are not offered or limited in Original Medicare.
Some of the extras may include:
► Dental benefits
► Vision benefits
► Hearing benefits
► Transportation benefits
► Chiropractic benefits
► Over the counter benefits
► Free Gym Membership