What is Medicare?
Medicare is a U.S. government health insurance program that is reserved for adults age 65 and older. Medicare doesn’t cover everything though, and it’s important to plan how you’re may handle some of those coverage gaps.
Getting a basic grasp of Medicare will help you understand the types of coverage you are and aren’t eligible for.
Who is covered Under Medicare?
U.S. citizens, or permanent legal residents of at least 5 years, age 65 and older are automatically entitled to Medicare.
Those under 65 years of age with certain medical conditions may be eligible as well.
Enrolling for Medicare
Those who receive social security benefits when the turn 65 will automatically be enrolled in Medicare Part A and Part B. Part A will cover hospital bills, while Part B will cover regular doctor appointments. Those who wish to enroll in prescription medicine costs (Part D) will need to manually enroll themselves.
If you are not receiving social security benefits when you turn 65, you’ll need to enroll yourself on the social security administration website. This should be done within the 7 month window surrounding your birthday month (3 months prior to your birthday month, your current birthday month, and 3 months after your birthday month.) This will help you avoid any financial penalties.
Should you be interested in additional coverage, such as Medicare Advantage, or Medigap, you should sign up during the same 7 month period. As long as you sign up within this 7 month enrollment period, both Medicare Advantage and Medigap are required to accept your enrollment.
What Does Medicare Cost?
Premiums are not required for Part A of Medicare as long as you or your spouse made Medicare tax payments for at least a decade. In most situations, these taxes are automatically deduced from your employee paycheck.
If you are eligible for Medicare but have not paid Medicare taxes for at least 10 years, you’ll need to pay a monthly premium for Part A up to $437/month.
Other sections of Medicare such as doctor appointments or prescription drugs will require a monthly premium.
What is covered under Part A of Medicare?
Inpatient hospital or skilled nursing facility visits are covered under Medicare Part A as long as they are not considered custodial or long-term. Under Part A, you may also receive some financial help for hospice and other health care. As of 2019, Medicare part A has a deductible of $1,364 and a coinsurance, meaning part of the bill is paid for by the patient.
The first 60 days of inpatient hospital care do not require a coinsurance payment.
What is covered under Part B of Medicare?
Doctor visits, medically necessary services, and other necessary medical products are covered under Medicare Part B. Included in this is:
- Preventative healthcare services
- Ambulance services
- Certain medical equipment
- Specified mental health services
- Approved prescription drugs
Monthly premiums are required for Part B coverage, starting at $135.50/month. Medicare Part B also has a deductible of $185; after which you’ll be required to pay 20% of the Medicare approved supplies and services.
Penalty Fees for Medicare Part B
If you fail to sign up for Medicare Part B while you’re are 65 and decide you wish to sign up at a later age, chances are you’ll be required to pay a fee of 10% of the premium price for each year you have waited. This penalty fee could follow you for life, as there are few who decide to drop Part B once they have acquired it.
What is Covered Under Medicare Advantage (Part C)?
Medicare Advantage (sometimes referred to as Part C) is a private health care plan that wraps Parts A, B and sometimes D together. This package may include extra coverage on certain services, such as dental or vision care. Medicare Advantage plans are usually PPOs or HMOs and have limited availability.
What is Covered Under Medicare Part D?
Part D involves the coverage of specific prescription drugs. These plans are offered by private providers and require a monthly premium averaging around $33. This with higher income tend to pay more. There is usually penalty for “late” enrollers.
What Isn’t Covered Under Medicare?
Long-term care is one of the most common expenses when it comes to Medicare. These costs are typically only covered for low-income folks with very little in their savings account.
Medicare typically doesn’t cover:
- Dentures
- Hearing aids or exams
- Massage therapy
- Acupuncture
- Overseas care
- Cosmetic procedures
Source: https://www.nerdwallet.com/blog/investing/what-is-medicare/
