Important Information
If you are turning 65 or just coming on to Medicare, it is time to start planning for healthcare costs. The first thing to do is sign up for Medicare by going to your local Social Security Office or by logging on to ssa.gov and clicking on Medicare Enrollment. You can do this 3 months prior to turning 65 or once you have a date of retirement. Once you have received your red, white and blue Medicare card you can start choosing the plans that are best for you.
- Medicare Part A (hospital coverage): refers to hospital insurance, specifically inpatient hospital stays. Also included in Part A is Skilled Nursing Care and Hospice Care. Part A is considered “Original Medicare”. Part A is free for most people- if you worked for 40 quarters or are drawing social security from a spouse who worked 40 quarters. There is a deductible for Part A, but once met, days 1-60 of hospitalization are covered 100%. After 60 days, you must pay an amount, per day, set by Medicare.
- Medicare Part B (doctor and medical coverage): is literally everything else. Doctors visits, preventative care, outpatient surgery, durable medical equipment, laboratory tests, x rays, ambulance services and some home health care. Part B is considered Original Medicare. Part B has a base premium and is means tested based on your modified adjusted gross income from two years prior. With Medicare Part B, there is an annual deductible that once met, Part B generally pays 80% of the Medicare-approved amount for covered services. (You pay 20%.) Medicare pays 100% of most preventive services.
- Medicare Part C is Medicare Advantage Plans (MA or MAPD) and is an alternative to “Original Medicare”. Part C plans are offered by private insurance companies and cover the same services Part A and Part B cover, and often include prescription drugs as well as some other services like vision, hearing, wellness programs and dental. The cost of a Medicare Advantage Plan depends on the insurance company offering the plan. The cost of premiums and copays vary by insurance plan and states.
- Medicare Part D: refers to Medicare’s prescription drug insurance plans. Just like Medicare Part C, these plans are administered through private insurance companies yet are run through the Center for Medicare and Medicaid Services (CMS). Part D plans are state specific and all states have dozens to choose from.
- Medigap Plans (Supplemental Plans): A Medigap policy is health insurance sold by private insurance companies to fill the “gaps” in original Medicare A and B. These plans are lettered A-N and standardized by the Federal Government.
The two paths for insurance are: Original Medicare A and B, a Medicare Medigap/Supplement + a standalone Prescription Plan (Medicare Part D). Or, a Medicare Advantage Plan (MAPD); Part C combines A + B + D into one plan.