Original Medicare
What is it and How does it work?
Let’s start with the basics – What is Original Medicare?
Medicare is the federal health insurance program for people who are 65 and older, have been deemed disabled or have certain health conidtions such as ALS or End-Stage Renal Disease (ESRD). Original Medicare is comprised of two parts – Part A and Part B.
Let’s start with the basics – What is Original Medicare?
Medicare is the federal health insurance program for people who are 65 and older, have been deemed disabled or have certain health coniditions such as ALS or End-Stage Renal Disease (ESRD). Original Medicare is comprised of two parts – Part A and Part B.
Part A
Covers inpatient hospital stays, skilled nursing facilities, hospice and non-custodial home health care.
Part B
Covers doctor’s visits, outpatient care, medical supplies, diagnostic tests and preventative services.
Does Medicare cost anything? If you have worked for 40 quarters (typically 10 years) or more then you are entitled to Part A and do not have a monthly premium to pay for it. However, Part B has a monthly premium of $164.90 – you may pay more if you’re income is higher or the State may pay the premium for you if you qualify for assistance.
So if I have Medicare then it pays for all of my costs? Not exactly. Under your Part A benefits, if you’re admitted into the hospital you’re responsible for a deductible of $1,600 per benefit period before Medicare begins to pick up any of the costs. Under your part B benefits, such as a doctor’s office visit or outpatient procedure, you’re responsible for an annual deductible of $226. Once that has been met then Medicare will pay 80% and you will be billed from your provider for the remaining 20%.
What doesn’t Medicare cover? Original Medicare doesn’t include prescription drug coverage (known as Part D) so that’s something you have to get from a private insurance company. Additionally, Original Medicare doesn’t cover routine vision, routine dental or hearing. It also doesn’t give you coverage for any over-the-counter health items (think vitamins, bandages, cold/flu medicines, etc), gym memberships, etc. In addition, there is no maximum out of pocket (MOOP) limit on what your costs can be for a calendar year – leaving you at risk of high costs if you have a bad year of health.
The Good News? There are Medicare Health Plans designed to help cover some or all of the gaps that leave you exposed. You could save more money, have more predictable costs and get extra benefits that cover some or all of what Medicare doesn’t cover. Better yet, some of these plans are available for an additional $0 per month!
What are my options? There are two main ways to cover the costs that Medicare doesn’t cover:
Option 1
Option 2
Medicare Advantage (aka Part C)
An all-in-one coverage that provides your Medicare Part A and Part B benefits and often includes your Part D prescription drug coverage. Out of pocket costs may be lower than Original Medicare. Usually includes extra benefits Medicare doesn’t cover.
Medicare Supplement (aka Medigap)
Secondary coverage to Original Medicare. Responsible for picking up part or all of the costs leftover after Medicare pays their portion. This type of plan does NOT include your Part D prescription drug coverage so you still have to add that on separately.
Option 1
Medicare Advantage (aka Part C)
An all-in-one coverage that provides your Medicare Part A and Part B benefits and often includes your Part D prescription drug coverage. Out of pocket costs may be lower than Original Medicare. Usually includes extra benefits Medicare doesn’t cover.
Option 2
Medicare Supplement (aka Medigap)
Secondary coverage to Original Medicare. Responsible for picking up part or all of the costs leftover after Medicare pays their portion. This type of plan does NOT include your Part D prescription drug coverage so you still have to add that on separately.