Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).
Medicare is made of different components and it’s important to understand the different parts.
Part A is your hospital insurance plan. It covers nursing care and hospital stays but does not cover the doctors’ fees. Anything other than room and board such as surgery, scans etc. Is NOT covered by Part A. Part A also covers some home health services, skilled nursing care after a hospital stay and hospice care.
You likely won’t have to pay a monthly premium for Medicare Part A, thanks in part to all the payroll taxes you paid while you were employed. You must, however, pay a yearly deductible before Medicare will cover any hospitalization costs. The Part A deductible for 2019 is $1,364 (per benefit period).
Medicare Part B basically covers everything other than your inpatient hospitalization fees. Without Medicare Part B you would not have coverage for preventative services, doctor visits, diagnostic testing, ambulance services, surgeries, cancer therapy (chemotherapy & radiation), kidney dialysis, medical equipment, mental health services etc. Medicare only covers 80% of Part B services and does not cover the annual deductible (deductible for 2019 is $185).
Part B is optional, and you may want to opt out of Part B if you still have health insurance through an employer, union, your spouse, etc. Part B requires that you pay a monthly premium to Medicare and this amount changes year to year.
A warning about delayed enrollment: If you opt out of Part B when you initially enroll in Medicare but later decide that you want the coverage, you may have to pay a higher premium . (You will not be penalized if you’ve had credible coverage through an employer, retiree program or through spouses health care coverage)
Medicare Part C is known as the “Medicare Advantage” Plans offered by private insurance companies. Medicare Part C is optional and cost and coverage varies from carrier to carrier. You must be enrolled into Medicare Parts A and Part B to qualify for Part C. Many Medicare Advantage plans cover Part D (prescriptions). These plans may change from year to year and you will want to review benefits at the end of each year.
The newest addition to the Medicare alphabet, Part D, helps you pay for prescription drugs. Part D is optional and available to people who are enrolled in Original Medicare (Parts A and B) and most Medicare Advantage plans.
Part D plans are offered by private insurance companies that are approved by Medicare. If you are enrolled in a Part D plan, you will pay a monthly premium and sometimes a deductible, as well as copayments for your drugs. Each plan varies in the cost of premiums, the price of drugs and its list of covered drugs or “formulary” under the plan.
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