MEDICARE
What is Medicare?
Medicare is the national, federally funded health insurance program for people who are 65 or older, or younger people with certain disabilities and/or end-stage renal disease. Medicare covers many inpatient and outpatient services, including medical services, drugs, and medical equipment.
Medicare Parts
There are 3 different parts for Medicare:
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Medicare Part A - covers inpatient hospitalization, skilled nursing facilities care, hospice care, and partly covers home care.
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Medicare Part B - covers outpatient care, including doctor's services, medical supplies, and preventative services.
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Medicare Part D - covers prescription drugs
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Click on Read More or continue scrolling down below for more details on each Medicare part.
Medicare Part A
Medicare Part A is often called "Hospital Insurance" because it covers everything related to hospitalization, including inpatient hospital stays and skilled nursing facilities. Well, how much does it cost? If you have completed 40 quarters (10 years) of work and paid the respective taxes for Medicare, you are eligible for Medicare Part A without having to pay a premium!
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But do I have to pay a deductible?
Yes. The Part A deductible is $1,408. That means you will not receive any benefits from Medicare Part A unless you have fully paid off the deductible. This is a per visit deductible, meaning that if you go to the hospital on Monday then again on Wednesday for a different reason, you will have to pay for the deductible twice!
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What about after my deductible is met?
Great question! Once your deductible is met, you need to be admitted to 2-night stay in a hospital before your hospital benefits kick in. After the 2 nights, you are fully covered at a 100% rate for nights 3 through 60.
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What happens after 60 days?
Between days 61 and 90 at the hospital, you are responsible for a daily deductible of $352.
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Am I covered after 90 days at all?
Yes, however the daily deductible after day 90 becomes a whopping $704! This continues until day 150 at the hospital.
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Well, what about after day 150?
You are not covered under Medicare Part A after day 150. This means that any incurred costs after day 150 needs to be fully covered out of pocket by the patient!
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That's a lot of information. Can you summarize everything in some charts for me?
Absolutely! See the charts below for both hospitalization and skilled nursing facilities coverages:
Medicare Part B
Medicare Part B is also known as Medical Insurance. It is part of the original Medicare and covers the cost for any medical services/supplies that are needed to treat your health conditions, including doctor's services, preventative services, ambulance services, laboratory tests, imaging, and other outpatient services.
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Am I eligible for Medicare Part B?
Anyone who is eligible for Medicare Part A is also eligible for Medicare Part B. Enrollment is required for Part B and the current 2021 premium is $148.50 (varies depending on income and marital status - see chart below for details).
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That's the monthly premium. Is there also a deductible?
Yes, there is also a deductible for Part B. The current annual deductible for Part B is $198, so your Part B coverage won't start until that is fully paid.
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That's a really low deductible!
Yes, it is! However once the deductible is met, you have to pay a 20% coinsurance fee for every visit. This does not have a cap - which means you could be responsible to pay large sums of money for ongoing outpatient care and/or significant surgeries! This is worrisome for many individuals who have worked hard throughout their career to build up their hard-earned savings.
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How can I protect myself and my wealth from this?
To protect from these excessively high medical bills, many seniors will consider purchasing private insurance called Medicare Supplement insurance policies (also known as Medigap policies).
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Whew. Where can I learn more about these Medicare Supplement policies?
Click on the Medicare Supplement tab to learn more, or schedule a free appointment/consultation with one of our experienced agents by calling 773.865.4480 or by scheduling a free consultation session with us!
Medicare Part D (Rx)
Medicare Part D is the drug coverage regulated and approved by Medicare, but offered by insurance companies. Each plan varies not only in monthly cost, but also in drug coverage. Thus, it is important not to base your enrollment on just the monthly cost of the plan. If you go with SMC, we will take into consideration your monthly premium, your annual deductible (if there is one), and your annual drug cost to make sure you are getting the best overall coverage for the year.
There are two ways to enroll in a Part D Plan:
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A stand-alone Medicare Part D Plan (PDP).
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A Medicare Advantage plan that includes drug coverage (MAPD).
To get a quick and free quote for a Medicare Part D Plan, please give us a call at 773-865-4480 and have your list of medications ready.
Donut Hole (Coverage Gap)
The most confusing and frustrating part of Medicare is the dreaded Donut Hole (officially known as the Coverage Gap). The bad news is that it generally makes the cost of your prescriptions go up.
Medicare can only give a certain amount of drug coverage for each person, so once your full cost (combination of what you pay and the insurance company pays) reaches $4,020, you will go into the coverage gap where you would pay 25% of the cost of both brand name medication and generic medication.Once you reach $6,350 out-of-pocket, you will get out of the Coverage Gap and reach Catastrophic coverage and the costs of your medications will drop significantly to just 5% or $3.35 for generics and $8.35 for brand-name drugs, whichever is greater.
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To find out more about the Coverage Gap and Catastrophic Coverage, please visit the Medicare.gov website.
Late Enrollment Penalty
Choosing not to enroll in Medicare Drug coverage when you are first eligible could lead to a late enrollment penalty. The penalty does not apply if you had other creditable drug coverage (such as employer/union coverage, VA benefits) or if you get Extra Help.
The late enrollment penalty is 1% of the average cost of a Medicare Part D plan. That average is about $32.74, which would be around $.30. That small penalty accumulates for the number of months you go without drug coverage. Once you do enroll in a drug plan, that extra penalty is added on to your monthly cost. For example, if you go two years without drug coverage and then enroll in a plan, Medicare would add on about $7.20 a month to the cost of your drug plan.
Extra Help
You may qualify for very little to zero premium and co-pays on your prescription plans if you meet certain income and resource qualifications. You may qualify if your previous years income was below $18,735 if you're single ($25,365 for married) and your resources add up to $14,390 if you’re single ($28,720 for married).
Resources that count are money in a checking or savings account, stocks, and bonds. Resources that don’t count are your home, one car, burial plot, furniture and other household and personal products.
If you’re on Medicaid or other state programs, you may automatically qualify for Extra Help.
To find out more about Extra Help and to see if you qualify, fill out an application with Social Security.
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If you have any other questions, feel free to contact us at 773.865.4480 or schedule your free consultation with our experts!