Medicare Basics

Medicare is a health insurance program provided by the government for people including those age 65 years or older, qualified people with disabilities, and people with end-stage renal disease. You can choose to receive your Medicare benefits in two ways:

Original Medicare -
Original Medicare is provided directly through Medicare and typically includes three parts:

  • Part A: Hospital Insurance – most people don’t have to pay a Part A premium, which helps pay for inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care
  • Part B: Medical Insurance – most people pay a monthly premium for Part B, which helps pay for doctor’s services, outpatient care, medical supplies, and many preventative services
  • Part D: Medicare Prescription Drug Coverage – helps cover the cost of prescription drugs and is provided by private insurance companies.

Medicare Advantage - 

An "all in one" alternative to Original Medicare is Medicare Advantage. These “bundled” plans include Part A, Part B, and usually Part D.

  • If you join a Medicare Advantage Plan, you’ll still have Medicare and still pay your Part B premium. However, you’ll get your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage from the Medicare Advantage Plan, not Original Medicare.
  • Some plans offer extra benefits — like vision, hearing or dental — that Original Medicare doesn’t cover.
Watch this short video to learn more about Medicare basics.

Medicare Supplements (Medigap)

Medicare supplement insurance, also known as Medigap, is sold by private insurance companies and supplements Original Medicare Parts A and B. These policies cover gaps in Original Medicare Parts A and Part B such as co-payments, coinsurances, and deductibles you would otherwise pay yourself. Most Medicare Supplement plans do not have a network and you will continue to pay your Part B premium. Below are some examples of the "gaps" a Medicare supplement helps cover:

2020 Costs at a Glance

Part A Premium The majority of people don't pay a monthly premium for Part A (sometimes called "premium-free Part A")
  • If you buy Part A, you'll pay a maximum of $458 each month
  • If you have paid Medicare taxes for less than 30 quarters, the standard Part A premium is $458
  • If you have paid Medicare taxes for 30-39 quarters, the standard Part A premium is $252
Part A Hospital In-Patient Deductible and Coinsurance This is what you pay:
  • A deductible of $1,408 for each benefit period
  • $0 coinsurance for the first 60 days of each benefit period
  • $352 coinsurance per day for days 61-90 of each benefit period
  • $704 coinsurance per each "lifetime reserve day" after day 90 for each benefit period (up to 60 days over your lifetime)
  • All costs beyond lifetime reserve days
Part B Premium $144.60 is the standard Part B premium amount for Part B, this could be higher depending on your income
Part B Deductible and Coinsurance Your cost is $198 per year. After your deductible is met, you typically pay 20% of the Medicare-approved amount for:
  • Most doctor services, including most doctor services while you're a hospital inpatient
  • Outpatient therapy
  • Durable Medical Equipment (DME)

Medicare Select

  • Medicare Select supplements are typically low-cost versions of traditional Medigap/Medicare supplements, but they require subscribers to use in-network hospitals, clinics and/or doctors. By negotiating prices within the network, the Medicare Select plans are able to keep their costs down. For this reason, Medicare Select plans usually have lower premiums than comparable Medigap policies.

Medicare Prescription Drug Plans (Part D)

Medicare prescription drug coverage, often referred to as Part D, is insurance that helps people pay for prescriptions. Everyone with Medicare is eligible for prescription drug coverage.

You can get Medicare prescription drug coverage through a stand-alone prescription drug plan (PDP), Medicare Advantage Prescription Drug plan (MA-PD), or Medicare Cost Plans if it is offered. You also may have creditable Medicare prescription drug coverage through an employer or group plan. This can be important to know in order to avoid possible penalties from Medicare. Watch this video to for more information on Medicare Prescription Drug Coverage.

The Annual Enrollment Period (AEP) for Part D of Medicare currently runs from October 15-December 7 of each year, with Special Election Periods (SEP) available under limited circumstances.

Navigating Part D can be a complicated process. Graber & Associates can help make it simple.

Medicare Advantage Plans

A Medicare Advantage Plan is another way to get your Medicare 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. If you join a Medicare Advantage Plan, you’ll still have Medicare but you’ll get most of your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage from the Medicare Advantage Plan, not Original Medicare.

Health Maintenance Organization (HMO)
Generally with an HMO Plan, you must get your care and services from the providers in your plan's network, with these exceptions:

  • Emergency Care
  • Out-of-area Urgent Care
  • Out-of-area Dialysis

Preferred Provider Organization (PPO)
PPO Plans do have network doctors, other health care providers, and hospitals. Each Plan gives you the choice to go to doctors, specialists, or hospitals that are not on that list. However, it will usually cost less if you receive care from providers on your network's list.

Veterans

  • In certain situations Medicare Advantage plans are a great fit for Veterans. Being enrolled Medicare Part A & B and having VA benefits is great but adding a Medicare Advantage Plan can help cap your out-of-pocket risk outside of the VA and add some great benefits that Original Medicare or the VA may not cover.

Cost Plans

A Medicare Cost plan is a unique Medicare product that helps cover the costs that Original Medicare does not cover.

A Cost plan is somewhat of a hybrid – a cross between a Medicare supplement and a Medicare Advantage plan. For some people, the benefits are the best of both worlds. Similar to an Advantage plan, a Cost plan has a network of doctors and hospitals that the insured must use. There may be some cost sharing (a copay for example) when visiting a doctor, for a hospital stay, labs, or diagnostic tests, but this cost sharing all adds up to an out-of-pocket maximum to limit the annual risk for the insured.

Cost plans may include additional benefits not covered under Original Medicare such as vision exams, eyewear coverage, hearing exams, gym memberships, and more. The rates do not vary based on age and generally are less expensive than a supplement but more expensive than an Advantage plan. Some Cost Plans may offer an optional prescription drug benefit to fulfill your creditable prescription drug needs as well. You will continue to pay your Part B premium.

As with a supplement, the client retains his or her original Medicare, ensuring the client has coverage even if they receive services from outside of the plan’s network. Medicare Cost plans do not have enrollment or dis-enrollment periods and they are not medically underwritten (with the exception of end-stage renal disease). When obtaining healthcare services you would show both your Original Medicare card and Cost plan card.

Contact a Graber & Associates agent today to find out if a Medicare Cost plan can offer you the best of both worlds.

MSA Accounts

Medical Savings Account (MSA) plans combine a high-deductible insurance plan with a medical savings account that you can use to pay for your health care costs.

  • High-deductible health plan: The first part of an MSA plan is a special type of high-deductible Medicare Advantage Plan. Only once you have met a high yearly deductible, which varies by plan, will this plan begin to cover your costs.
  • Medical Savings Account (MSA): The second part of an MSA plan is a special type of savings account. Money will be deposited into your account by the MSA plan. You can choose to use money from this savings account before you meet the deductible in order to pay your health care costs.

All MSA plans must cover Medicare Part A and Part B services. In addition, some MSA plans may cover extra benefits, for an extra cost, such as:

  • Dental
  • Vision
  • Long-term care not covered by Medicare

A few key notes of an MSA Plan are as follows:

  • There is no monthly premium you pay for the plan
  • You will want to enroll into a separate Prescription Drug Plan
  • At the end of the year, money left in your account will stay in the account, and may be used for future health care costs. The new deposit in the following year will be added to the leftover amount if you stay with the same MSA plan.
  • Funds from the account should be used for Qualified Medical Expenses,  which can be found in Publication 502 from the IRS .

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