Financial Intel Monthly

Medicare

May 16, 2019 12:43:15 PM / by The Retirement Group (800) 900-5867

Medicare is a federal program that provides health insurance to
retired individuals, regardless of their medical condition, and certain younger
people with disabilities or end-stage renal disease. Here are some basic facts
about Medicare that you should know.

What does Medicare cover?

Medicare coverage consists of two main
parts: Medicare Part A (hospital insurance) and Medicare Part B (medical
insurance). These parts together are known as Original Medicare. A third part,
Medicare Part C (Medicare Advantage), covers all Part A and Part B services,
and may provide additional services. A fourth part, Medicare Part D, offers
prescription drug coverage that can help you handle the rising costs of
prescriptions.

 

Medicare Part A (hospital insurance)

Generally known as hospital insurance,
Part A covers services associated with inpatient hospital care. These are the
costs associated with an overnight stay in a hospital, skilled nursing
facility, or psychiatric hospital, including charges for the hospital room,
meals, and nursing services. Part A also covers hospice care and home health
care.

 

Medicare Part B (medical insurance)

Generally known as medical insurance,
Part B covers other medical care. Physician care — whether you received it as
an inpatient at a hospital, as an outpatient at a hospital or other health-care
facility, or at a doctor's office — is covered under Part B. Laboratory tests,
physical therapy or rehabilitation services, and ambulance service are also
covered. Medicare Part B also covers 100% of the cost of many preventative
services and an annual wellness visit.

 

Medicare Part C (Medicare Advantage)

A Medicare Advantage plan is a private
health-care plan that contracts with Medicare to provide Part A and Part B
benefits. A Medicare Advantage plan covers all of the services that Original
Medicare covers except hospice care. Some plans offer extra coverage for
expenses not covered by Original Medicare such as vision, hearing, dental, and
other health expenses. Most also offer prescription drug (Part D) coverage.
Several types of Medicare Advantage plans may be available, including health
maintenance organization (HMO) plans, preferred provider organization (PPO)
plans, private fee-for-service (PFFS) plans, and special needs plans (SNPs).
You can choose to enroll in either Original Medicare or a Medicare Advantage
plan. If you enroll in a Medicare Advantage plan, you'll generally pay a
monthly premium for it, in addition to your Part B premium.

 

Medicare Part D (prescription drug coverage)

All Medicare beneficiaries are eligible
to join a Medicare prescription drug plan offered by private companies or
insurers that have been approved by Medicare. Although these plans vary in
price and benefits, they all cover a broad number of brand name and generic
drugs available at local pharmacies or through the mail. Medicare prescription
drug coverage is voluntary, but if you decide to join a plan, keep in mind that
some plans cover more drugs or offer a wider selection of pharmacies (for a
higher premium) than others. You can get information and help with comparing
plans on the Medicare website, medicare.gov, or by calling a Medicare counselor at
1-800-Medicare.

 

What is not covered by Medicare Parts A and B?

Some medical expenses are not covered
by either Part A or B. These expenses include:





·        
Your Part B premium

·        
Deductibles, coinsurance, or co-payments that apply

·        
Most prescription drugs

·        
Dental care

·        
Hearing aids

·        
Eye care

·        
Custodial care at home or in a nursing home

Medicare Part C may cover some of these
expenses, or if you're enrolled in Original Medicare you can purchase a
supplemental Medigap insurance policy that will help cover what Medicare does
not.

 

Are you eligible for Medicare?

Most people age 65 or older who are
citizens or permanent residents of the United States are eligible for Medicare
Part A (hospital insurance) without paying a monthly premium. You are eligible
at age 65 if:





·        
You receive or are eligible to receive Social Security or Railroad
Retirement Board benefits based on your own work record or on someone else's
work record (as a spouse, divorced spouse, widow, widower, divorced widow,
divorced widower, or parent), or

·        
You or your spouse worked long enough in a government job where
Medicare taxes were paid

In addition, if you are under age 65,
you can get Part A without paying a monthly premium if you have received Social
Security or Railroad Retirement Board disability benefits for 24 months, or if
you are on kidney dialysis or are a kidney transplant patient.





Even if you're not eligible for free
Part A coverage, you may still be able to purchase it by paying a premium. Call
the Social Security Administration (SSA) at (800) 772-1213 for more information.





Although Medicare Part B (medical
insurance) is optional, most people sign up for it. If you want to join a
Medicare managed care plan or a Medicare private fee-for-service plan, you'll
need to enroll in both Parts A and B. And Medicare Part B is never free —
you'll pay a monthly premium for it, even if you are eligible for premium-free
Medicare Part A.

 

How much does Medicare cost?

Medicare deductible amounts and
premiums change annually. Here's what you'll pay in 2019 if you're enrolled in
Original Medicare:

 


Premium

Deductible

Coinsurance

Part A (hospital)

None for most people, but noneligible individuals pay up
to $437 per month (if they have 39 or fewer quarters of Medicare-covered
employment)

$1,364 per benefit period

$341 a day for the 61st to 90th day each benefit period;
$682 a day for the 91st to 150th day for each lifetime reserve day (total of
60 lifetime reserve days); $170.50 a day for the 21st to 100th day each
benefit period for skilled nursing facility care

Part B (medical)

The standard Part B premium amount is $135.50 (subject to
an income-based adjustment). However, some people who get Social Security
benefits will pay less than this amount. See below for more information.

$185 per year

After satisfying a deductible if one applies, you normally
pay 20% of the approved amount for medical expenses (20 to 40% for outpatient
mental health services, 20% for hospital charges for outpatient hospital
services, nothing for laboratory services)

If you have your premiums deducted from
your Social Security benefits, and the increase in your benefits for 2019 will
not be enough to cover the Medicare Part B increase, then you may pay less than
the standard Part B premium. Otherwise, you may pay the standard Part B premium
of $135.50. You'll also pay the standard Part B premium of $135.50 (or higher)
if:





·        
You enroll in Part B for the first time in 2019.

·        
You don't get Social Security benefits.

·        
You're directly billed for your Part B premiums.

·        
You have Medicare and Medicaid, and Medicaid pays your premiums.

·        
Your modified adjusted gross income as reported on your federal
income tax return from two years ago is above a certain amount.*

The table below shows what you'll pay
if you're in this group.

 


If
you file an individual income tax return with income that is:

If
you file a joint income tax return with income that is:

If
you file an income tax return as married filing separately with income that
is:

Monthly
premium in 2019:

$85,000
or less

$170,000
or less

$85,000
or less

$135.50

Above
$85,000 up to $107,000

Above
$170,000 up to $214,000

N/A

$189.60

Above
$107,000 up to $133,500

Above
$214,000 up to $267,000

N/A

$270.90

Above
$133,500 up to $160,000

Above
$267,000 up to $320,000

N/A

$352.20

Above
$160,000 and less than $500,000

Above
$320,000 and less than $750,000

Above
$85,000 and less than $415,000

$433.40

$500,000
and above

$750,000
and above

$415,000
and above

$460.50

*Beneficiaries with higher incomes have
paid higher Medicare Part B premiums since 2007. To determine if you're subject
to income-related premiums, the SSA uses the most recent federal tax return
provided by the IRS. Generally, the tax return you filed in 2018 (based on 2017
income) will be used to determine if you will pay an income-related premium in
2019. You can contact the SSA at (800) 772-1213 if you have new information to
report that might change the determination and lower your premium.





Since Original Medicare doesn't cover
every type of medical care, and you'll have to pay deductibles and coinsurance,
you may want to buy a Medicare supplemental insurance (Medigap) policy.





If you're enrolled in a Medicare
Advantage plan, you'll generally pay one monthly premium for that plan in
addition to your Medicare Part B premium. Each Medicare Advantage plan has
different premiums and costs for services, and coverage varies, so what you'll
pay depends on the plan you have.

 

Who administers the Medicare program?

The Centers for Medicare & Medicaid
Services (CMS) has overall responsibility for administering the Medicare
program and sets standards and policies. The CMS also manages the official
government website for Medicare, medicare.gov. But it's the SSA that processes
Medicare applications and answers Medicare eligibility questions.

 

How do you sign up for Medicare?

You'll generally be automatically
enrolled in Medicare when you turn 65 if you're already been receiving Social
Security or Railroad Retirement Board benefits for at least four months before
you turn 65. The SSA will notify you that you're being enrolled. If you're not
automatically enrolled and are eligible for Medicare at age 65, you have a
7-month initial enrollment period to sign up for Part A and/or Part B.





Although there's no cost to enroll in
Medicare Part A, you'll pay a premium to enroll in Medicare Part B. If you've
been automatically enrolled in Part B, you'll be notified that you have a
certain amount of time after your enrollment date to decline coverage. Even if
you decide not to enroll in Medicare Part B during the initial enrollment
period, you can enroll later during the annual general enrollment period that
runs from January 1 to March 31 each year. However, you may pay a slightly
higher premium as a result, depending on the circumstances





If you decide to postpone applying for
Social Security past your 65th birthday, you can still enroll in Medicare when
you turn 65. The SSA suggests that you call (800) 772-1213 three months before
you turn 65 to discuss your options. The easiest way to apply for Medicare is
online at socialsecurity.gov.

 

 

Tags: The Retirement Group

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