What is Medicare?
Medicare is the federal health insurance plan that is open to qualifying people. To get Medicare, you must be 65 or older. Younger people who have certain disabilities may qualify, and people who have end-stage kidney failure qualify. If a person is insured by Medicare, the program will pay certain health costs, depending on the type of coverage the person has.
The Medicare program can get a bit confusing, as it has several parts including Part A, Part B, Part C, and Part D. Each of these parts fulfills a different purpose, and they don’t all work together. Also, a person can choose to limit coverage to only Part A, but you’re not allowed to have only Part B or only Part D.
To make things even more difficult to keep straight, the cost of the different parts can vary greatly, anywhere from zero dollars per month to hundreds. What Medicare costs depends on the coverage being sought and where the coverage will be used. Once you understand what each part of Medicare can do for you it’s easier to sort things out and decide what you need. Often talking to a professional familiar with Medicare will help you to reach a full understanding of how Medicare works, what the different parts are, and what you need.
Medicare Part A
Medicare Part A is the foundation of what is usually referred to as traditional Medicare. Part A includes hospital coverage if you’re in the hospital, but also covers certain other needs. This coverage pays for hospice care for people who have a terminal condition, and it also pays for care in a skilled nursing facility. In addition, Medicare Part A will pay certain costs of home health care.
This part of Medicare does not pay for other expenses, even if they are required. It will not pay for visits to the doctor, routine care, basic health care, or other medical needs. It also does not cover the costs of prescriptions you need. The only time Medicare Part A pays any of these costs is if they are done as part of a covered hospitalization.
Most of the time you don’t have to pay for Medicare Part A if you or your spouse previously paid Medicare taxes. You usually need to have paid these taxes for a certain number of years in order to be eligible for premium-free Medicare Part A at age 65. If you are 65 you will also be covered without paying a premium if you get retirement benefits either from the Railroad Retirement Board or from Social Security, or if you are eligible for these benefits but haven’t yet filed for them. Another way to get premium-free Part A is if you or your spouse were employed by the government in a job that carried Medicare coverage.
If you are under 65 years old you can get premium-free Medicare Part A if you got disability benefits for 24 months from Social Security or the Railroad Retirement Board. You can also get premium-free Medicare Part A if you meet certain requirements and you have end-stage renal disease. If you don’t qualify under any of those conditions, you will have to pay a premium to get Medicare Part A. The amount of the premium will depend on how many quarters you worked and paid Medicare taxes.
Medicare Part B
What is Medicare Part B? First of all, you can’t get Medicare Part B unless you also have Medicare Part A. Medicare Part B pays for medical expense not covered by Part A, such as doctor visits, medical supplies, and outpatient services. These services must be medically necessary, and include services and supplies needed for the diagnosis and treatment of health conditions. These services must meet the accepted professional standards before they qualify for payment.
Preventive services are also covered, and you don’t have to pay anything for things such as flu shots or treatment to keep an illness in the early stages from getting worse. Medicare Part B also pays for ambulance services, clinical research, durable medical equipment, mental health services, and some limited prescription drugs. Exactly what is covered depends on multiple factors, including federal and state laws and on decisions made by Medicare that will affect national coverage of certain treatments or conditions. It’s best to speak to a local expert to find out what is covered where you live.
Medicare decides how much you pay for Part B based on your income. Almost everybody pays the standard rate, which was $135.50 for 2019. If your modified adjusted gross income is above a certain level based on your tax return from two years ago, you will likely have to pay more. This is called the Related Monthly Adjustment Amount. Either way, your Part B premium will be deducted from your monthly benefits if you receive money from Social Security, the Railroad Retirement Board, or the Office of Personnel Management. If you don’t get benefits from any of these, you’ll be billed for your premium.
You have to pay a deductible for Medicare Part B. This amount will be $198 in 2020. Once it’s paid, you’ll have to pay 20 percent of the Medicare-approved expenses for your Part B healthcare.