Originating in the 1960s, Medicare is a government-provided fee-for-service insurance program intended primarily for seniors. The program encompasses several distinct parts, each of which is outlined below.
You will first contact Social Security to sign up for Medicare Parts A & B. You can do that by phone at 800-772-1213, or online at www.ssa.gov The earliest you can sign up is 90 days before your 65th birth month. Below is a simple breakdown of how it all works.
There are 2 parts to Medicare: A & B. It’s important to note that there are no prescription drug plans available in parts A & B.
Part A is Hospitalization Insurance – Meaning it helps covers expenses accrued from hospitals, skilled nursing facilities & hospice. Part A is free, meaning no monthly premium, for most Americans based on your work history. So, if you have worked 10 years or 40 quarters, the equivalent of 10 years, then you will not have a monthly premium for Part A.
- Part A has a deductible of $1,484 per benefit period
- Part A has copays of $371/day for days 61-90 for hospitalization
- Part A has copays of $742/day for days 91-150 for hospitalization
Part B is Medical Insurance – It covers all doctor visits (both primary & specialists), labs & imaging.
- The monthly premium is roughly $148.50 based on your income
- The annual deductible is $203
- 80/20 after deductible
Once you have A & B you can enroll in either an Advantage Plan or a Supplement plan. Just understand that you cannot have both. And whether you choose a supplement or an Advantage plan, you would continue to pay your Part B premium each month.
Advantage Plans replace Original Medicare, Parts A & B. With Advantage Plans you will be responsible for copays, coinsurances and deductibles for most Medicare covered services. You have a network of providers, such as an HMO or a PPO. You would also have an out-of-pocket maximum. Prescription drug plans are included with most plans. And because they replace A & B, Social Security will send your Part B premium to the Advantage plan, which could leave you with a very low, sometimes even a $0 monthly premium for your Advantage plan.
Supplement Plans are not a replacement to original Medicare (Parts A & B). They are more of a gap coverage for the copays, deductibles and co-insurance costs associated with A & B.
- With a supplement plan there is NO NETWORK! You can see any doctor that accepts Original Medicare in the US.
- Supplement Plans have little to no OOP costs for Medicare covered services, depending on the plan you choose. When you pay the premium for your supplement plan, unlike Advantage Plans where you’ll still have copays, the supplement plans have no copays! Once you pay the monthly premium, most everything is covered depending on the plan you choose. So, surgeries, primary care or specialist visits; you would pay the monthly premiums and can have your copays covered.
- Supplement plans do not include a prescription plan. In this case, you would need to add a stand-alone Part D Rx plan.
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*Disclaimer: This page has not been reviewed or endorsed by Medicare.gov or any member of the Centers for Medicare & Medicaid Services (CMS).