Too often Medicare is made more complicated than it should be. Sure, there are things you need to understand, but at its core, Medicare is simply health care.
Let’s talk about the different ways Medicare works to deliver you health care.
There Are Four Parts to Medicare:
- Medically necessary Doctors’ services, outpatient and home health care, and durable medical equipment
- Prescription drugs
- A way to put these three things in one package called Medicare Advantage
Medicare Part A: Hospitalization Insurance
Part A Helps Pay:
- Inpatient hospital care
- Inpatient skilled nursing facility care (No long term, no custodial)
- Hospice care
- Home health care
- Inpatient care in a religious non-medical health care institution
Does Medicare Part A Pay Everything For These Services?
Medicare Part A has co-payments, co-insurance, and deductibles. If you do not have a Medigap insurance policy, or do not receive your Medicare through a Medicare Advantage plan (Medicare Advantage plans may have their own co-pay, co-insurance, and deductibles), you are responsible for all co-payments, co-insurance, and deductibles.
What is a Medigap Insurance Policy?
Medigap is a collection of 10 protection plans offered by private insurance companies.
Centers For Medicare and Medicaid Services, or CMS, names these: Plan A, Plan B, Plan C, Plan D, Plan F, Plan G, Plan K, Plan L, Plan M, and Plan N. Here is the link to the CMS page for Medigap coverage requirements.
You buy one of these 10 Medigap plans on the open market and they are not part of CMS, or Medicare. They are private insurance companies and under certain circumstances can deny you coverage.
What is Medicare Advantage?
We’ll get to that in a minute.
Why Are There So Many Medigap Insurance Plans?
Because some Medigap insurance plans cover more gaps than others. But, even though the plans are different in how much they cover, each carrier MUST provide you the exact same plan for plan coverage as all other carriers.
That means if you buy Plan G from Joe’s Medigap insurance company, it will give you the exact same coverage as the Plan G you could buy from Jane’s Medigap insurance company. The only difference between Joe and Jane’s Plan G can be the price.
What Does A Medigap Plan Do?
Medigap plans pay the co-payment, co-insurance, and deductible gaps in Medicare Part A Hospitalization that a hospital would otherwise send you a bill to pay.
Will A Medigap Insurance Plan Cover All The Gaps In Medicare Part A?
Is Medicare Part A Free?
When this was written, the Medicare Part A premium is $422.00. But, if you have worked for 40 quarters (10 years) you have paid your premium through payroll deductions. The only people who pay Part A premiums directly out of pocket are those who have not satisfied this work-time requirement.
Medicare Part B: Medically Necessary Doctors’ Services, Outpatient and Home Health Care, and Durable Medical Equipment
Part B Helps Pay Things Like:
- Ambulance services
- Durable medical equipment (DME)
- Mental health inpatient, outpatient, and partial hospitalization
- Second opinions before surgery
- Some limited outpatient prescription drugs
The best ways to find out if any particular medical service is covered by Medicare:
- Talk to your doctor
- Click this link and enter your service in the box
Does Medicare Part B Pay Everything For These Services?
Once you reach your Medicare Part B deductible, generally Medicare Part B will pay 80% of the doctors’ agreed upon Medicare assignment fee (more on that later). If the doctor does not agree to accept Medicare Assignment, you will pay more.
Generally speaking then, you will pay 20% of the Medicare Part B services.
Do Medigap Insurance Policies Pay The Gaps in Medicare Part B?
Some Medigap insurance plans pay more cost than others, the difference in what uncovered Medicare costs a Plan pays will be dependent on the plan’s price. More gaps paid means a higher price premium for the plan.
Some plans with co-pay and co-insurance set a maximum out of pocket payments you pay in a coverage period.
Is Medicare Part B Free?
When this was written, $185.00 is the standard monthly premium Medicare beneficiaries pay.
At certain incomes the amount of the monthly premium increases.
There is no pay-roll tax for Medicare Part B. That means even if you have worked 40 quarters (10 years) you will still pay a Medicare Part B premium.