Medicare Explained 2021
Medicare is divided into 4 parts: Part A, Part B, Part C, and Part D
Original Medicare consists of Part A and Part B.
Medicare Part A (Hospital)
Covers an inpatient hospital stay specific to only Room, Board, and general nursing services.
Something important to keep in mind is going to the Emergency Room or in Observation at the hospital, DOES NOT constitute “inpatient” status. You are not considered “inpatient” until a physician formally admits you into the hospital and declares that you are an inpatient. Until you are formally admitted Part A does not kick in. Once formally an “inpatient” and Part A is activated, you are responsible for a deductible of $1,484.00 per benefit period. A deductible is due each hospital admission if 60 days exist between stays. The coinsurance after the deductible for days 1-60 is $0.00 per day of each benefit period. If you stay longer than 60 continuous days, your copay is $371.00 per day for days 61-90 and $742.00 per day for days 91-150. Medicare pays the rest. Starting on day 151 Medicare pays nothing.
Medicare Part A also pays 100% of days 1-20 in a skilled nursing facility (rehab center). If you stay longer than 20 days your copay is $185.50 per day for days 21-100. Medicare pays after the copay has been satisfied. On day 101+, Medicare pays nothing, and you are responsible for all charges.
There is no max out of pocket under Original Medicare for Part A or Part B.
Part A also covers Hospice and home health care following a stay in the hospital.
Medicare Part B (Medical)
Everything else Medical falls under Part B. You pay an annual deductible of $203.00 then it goes to a basic 80/20 plan. Medicare pays 80% of the Medicare approved charges, then you must pay the remaining 20%. There is a premium for Part B for most people and in 2021 that premium is $148.50 (subject to income limits). Higher income earners will pay a higher premium for Part B (IRMAA). Please visit medicare.gov for more details.
Part B includes (but not limited to):
- Doctors office visits
- In-patient surgery
- Out-patient surgery
- Blood work/lab testing
- MRI, CAT scan, CT Scan
- Emergency room and observation prior to admission
- Ambulance ride
- Doctor/surgeon treating you in hospital
- All hospital services rendered
Medicare Part C (Medicare Advantage Plans)
A Medicare Advantage Plan is another way to get your Medicare Part A and Part B coverage. Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by Medicare-approved private companies that must follow rules set by Medicare. Most Medicare Advantage Plans include drug coverage (Part D). In many cases, you’ll need to use health care providers who participate in the plan’s network and service area for the lowest costs. These plans set a limit on what you’ll have to pay out-of-pocket each year for covered services, to help protect you from unexpected costs. Some plans offer out-of-network coverage, but sometimes at a higher cost. Remember, you must use the card from your Medicare Advantage Plan to get your Medicare-covered services. Keep your red, white, and blue Medicare card in a safe place because you’ll need it if you ever switch back to Original Medicare.
If you join a Medicare Advantage Plan, you’ll still have Medicare but you’ll get most of your Part A and Part B coverage from your Medicare Advantage Plan, not Original Medicare.
What are the different types of Medicare Advantage Plans?
- Health Maintenance Organization (HMO) plan
- HMO Point-of-Service (HMOPOS) plan: This HMO plan may allow you to get some services out-of network for a higher copayment or coinsurance.
- Medical Savings Account (MSA) plans
- Preferred Provider Organization (PPO) plan
- Private Fee-for-Service (PFFS) plan
- Special Needs Plan (SNP) Certain health conditions
- Dual Eligible Plan (DSNP) Medicare and Medicaid eligible
What do Medicare Advantage Plans cover?
Medicare Advantage Plans cover almost all Medicare Part A and Part B benefits. Plans must cover all emergency and urgent care, and almost all medically necessary services Original Medicare covers. However, if you’re in a Medicare Advantage Plan, Original Medicare will still cover the cost for hospice care, some new Medicare benefits, and some costs for clinical research studies.
Plans can offer extra benefits
Most Medicare Advantage Plans offer coverage for things Original Medicare doesn’t cover, like some vision, hearing, dental, and fitness programs (like gym memberships or discounts). Plans can also choose to cover even more benefits. For example, some plans may offer coverage for services like transportation to doctor visits, over-the-counter drugs, and services that promote your health and wellness. Plans can also tailor their benefit packages to offer these benefits to certain chronically-ill enrollees. These packages will provide benefits customized to treat specific conditions. Check with the plan before you enroll to see what benefits it offers, if you might qualify, and if there are any limitations.
Part D (Drug coverage)
Medicare drug coverage helps pay for prescription drugs you need. Even
if you don’t take prescription drugs now, you should consider getting Medicare drug coverage. Medicare drug coverage is optional and is offered to everyone with Medicare. If you decide not to get it when you’re first eligible, and you don’t have other creditable prescription drug coverage
(like drug coverage from an employer or union) or get Extra Help, you’ll likely pay a late enrollment penalty if you join a plan later. Generally, you’ll pay this penalty for as long as you have Medicare drug coverage. To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage. Each plan can vary in cost and specific drugs covered.
There are 2 ways to get Medicare drug coverage:
1. Stand Alone Drug Plans These plans add drug coverage to Original Medicare, some Medicare Cost Plans, some Private Fee-for-Service plans, and Medical Savings Account plans. You must have Part A and/or Part B to join a separate Medicare drug plan.
2. Medicare Advantage Plans You get all of your Part A, Part B, and drug coverage, through these plans. Remember, you must have Part A and Part B to join a Medicare Advantage Plan, and not all of these plans offer drug coverage.
In either case, you must live in the service area of the plan you want to join.