Medicare
This week we’ll deep dive into the complex topic of the primary insurer in the USA of people over 65, Medicare. We definitely won’t be able to cover everything, but hopefully we can cover the basics. For more details, visit medicare.gov! Medicare is an insurance for older adults and those with certain conditions like end-stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS or Lou Gehrig’s Disease) and it is divided into four parts. The basic qualifications for Medicare are to be a US citizen or live legally in the US for at least 5 years, be 65 or have a qualifying condition, and to be currently living in the USA. Another thing that will allow a person to qualify is if that person is married to a US citizen. The eligibility window starts 3 months before a person’s 65th birthday month and ends 3 months after that person’s birth month, for a total of 7 months eligibility. So if a person is born in April, they are eligible for their initial sign up from January through July.
Medicare Part A is a “facility insurance.” It covers hospital stays, skilled nursing facility stays, some home health, and hospice care. Skilled nursing facilities (SNF) are covered completely for the first twenty days, then a person is responsible for about $185 per day from days 21-100 and finally ALL costs at a SNF from day 101 and on. This is per “benefit period” and resets after a person has been out of a hospital or SNF for 60 days. If a person is discharged from a hospital to a skilled nursing facility on January 1, Medicare will cover all facility costs through January 21 and then that person will be responsible for paying $185 per day. If that person is discharged from the skilled nursing facility on January 21, then their benefit period will reset on March 22. If they have to go back to a skilled nursing facility before then, the personal cost responsibility will be in place. If a person has paid Medicare taxes for 10 years, then that person will qualify for “premium-free” Medicare Part A, which means there is no additional monthly payment required. If a person hasn’t paid into Medicare taxes for 10 years, the monthly payment will be variable.
Medicare Part B is a “medical insurance.” It covers doctors visits, medical equipment, and outpatient care. This can confuse many people because some people will enroll in just Medicare Part A thinking it covers everything, but to have complete coverage for medical services a person should have Part A and Part B. Part A will cover everything in the hospital and SNF that is required by the facility such as meals, nursing care, social work, therapies, medical supplies in the facility, and ambulance transportation, but it will not cover the billing from physicians when they come to round on that person. That is covered by Part B. Part B also pays for outpatient doctor visits for preventative and “medically necessary” visits. It also covers medically necessary durable medical equipment such as hospital beds, wheelchairs and other assistive devices, nebulizers, and diabetic supplies. Even if a person has paid 10 years into Medicare taxes, there is a monthly premium for Part B. Right now it is around $150 per month.
Medicare Part C is a group of plans that combine Parts A, B, and D in to what is called “Medicare Advantage Plans.” These generally offer everything traditional Medicare covers with additional benefits, and also require monthly payments.
Medicare Part D is a “drug insurance.” It covers most medications with a few exceptions, and requires enrollment in a separate plan similar to Part C. A common exception to coverage are medications for erectile dysfunction, and these medications can be exorbitantly expensive without coverage. Part D also requires a monthly premium, dependent on the plan chosen as well as taxable income from the prior year. Some plans have a deductible that must be hit before Part D starts to cover medication cost, and Medicare has limited that deductible to a maximum of $445 at this time. There is also something called the “donut hole” which is a complex idea but essentially after a person and drug plan has paid $4130, that person will be solely responsible for roughly the next $6000 in medication payments before insurance will begin to pay drug costs again. This can cause a lot of people to stop taking medications and typically happens toward the end of the year.
It is important to note that Medicare does not cover long term care, dental care, dentures, hearing aids, cosmetic surgery, and routine foot care. When it comes time to look in to medical coverage at age 65 for you or a loved one, be sure to investigate all options and a trusted insurance broker would be worth consulting with to be sure what Matters to your (or your loved one’s) health is covered.
Key Points:
Medicare is a complex insurance made up of 4 parts
Medicare Part A covers facility fees, like hospital and skilled nursing
Medicare Part B covers outpatient and doctor fees
Medicare Part D covers medications
Medicare Part C is usually a combination of Part A, B, and D
Medicare does not cover long term care, dental visits, dentures, hearing aids, routine foot care or cosmetic surgery
