Medicare: Part II
It’s almost Halloween, so we wanted to talk about something that can sometimes be a little spooky… Medicare. Are you frightened yet? Hopefully not, but we know from our experience when our clients have to enroll in Medicare for the first time it can be an intimidating thing. Think about it, you have been on your employer’s insurance for years then one day you have to make a change. Change by itself can be a scary thing; changing insurance can be scary and confusing. We’ll try to simplify and break it down. If you missed Part I of this blog, you can check it out here.
Let’s start with Part A. Part A has NO PREMIUM (cost to the beneficiary) associated with it for most beneficiaries. Part I of this blog stated that Part A covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health coverage. But these all have limitations associated with them.
First, the inpatient hospital stays are covered for a limited time. However, there is a deductible that beneficiaries pay for inpatient hospital days before the Medicare payments begin. Be careful because inpatient hospital days may not be what you think; you MUST ask if you’ve been “admitted” or are in for “observation.” (Check out our previous blog Are You Being Admitted or Observed?) Observation days are not covered by Medicare, and hospitals are penalized if too many patients are admitted for less than three days.
Skilled nursing facility care is only covered if the beneficiary is admitted after a hospital stay, and is expected to recover. Only a certain number of days are covered by Medicare.
Let’s look at Part B. This covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and other items. There is monthly premium for this coverage, the cost being a function of the workers’ income. The premium usually is deducted from, and before, the monthly Social Security benefit is sent. There is an annual deductible for Part B.
Part C coverage is also known as Medicare Advantage. Health insurance companies offer these, and Medicare approves the plans. Medicare Part C annual cost varies by the provider as does the specific coverage that the plan provides. Generally, however, it provides most of the coverage of Parts A and B, and some policies have additional coverages beyond, but coverage details vary significantly between providers.
Part D is coverage for pharmacy prescriptions. Health insurance companies offer this coverage, and the coverage varies by provider and coverage details. The formulary (list of drugs covered by the plan) varies by provider. Be sure to check the formulary for a Part D provider before you sign up.
Of course, all the costs, and even the benefits are subject to change over time. The plan that is optimal for you in one year may turn out to be suboptimum the next. You have to start checking around October of each year to determine which plan is right for you.
SUPPLEMENTARY OR MEDIGAP COVERAGE
Finally, there are health insurance policies available that cover many things excluded from the above policies. They are known as Supplementary or Medigap policies, but these cannot include Part D prescription coverage. You must have Medicare Parts A and B coverage if you want to purchase one of these. Health insurance companies offer them, and their coverages vary. However, there are many different Medigap policies, with varying costs, benefits and availability by geographical area.
Hopefully after breaking down the different parts you can start to make sense of Medicare and it won’t be so scary when your time comes to enroll. Happy Halloween!
-Harold Sasnowitz & Clay Wood