Medicare

Medicare is the federal government’s health insurance program for people 65 and older. As well as those under 65 who have certain illnesses or disabilities. This program provides essential coverage to older adults, so you can keep your medical expenses in check as you age. It is split into several parts, with each part covering different services to keep you healthy. 

Jump To:

• Original Medicare Parts

• What Isn’t Covered by Medicare

• How to Enroll in Medicare

• Medicare Enrollment Periods

• FAQ

• Let EZ Help

Original Medicare Parts

Original Medicare is divided into four parts: Part A, Part B, Part C, and Part D. Each part provides distinct coverage, and each one has different costs that you will be responsible for. As with any insurance, there are gaps in coverage. Meaning certain things aren’t fully covered, that’s where Medicare Supplement Plans come in.

Part A

Part A is also known as hospital insurance. It covers inpatient hospital stays or skilled nursing facility care, but not custodial or long-term care. Part A also contributes to the cost of hospice care and some home healthcare. 

Most people do not have to pay Part A premiums if they or their spouse paid Medicare taxes for at least 10 years. These taxes are included in the payroll taxes deducted from the majority of people’s paychecks. You can check your Social Security statement, which is available on the Social Security Administration’s website, to see if you qualify. 

If you do not qualify for premium-free Part A, you will most likely still be able to opt into it. However, you will have to pay a high monthly premium. In 2023, the monthly premiums for Part A can be up to $506 per month.

While you probably won’t have to pay a monthly premium for Part A, there are still out-of-pocket costs. In 2023, Part A has a $1,600 deductible for each benefit period. Additionally, if you spend more than a certain amount of time in the hospital during the year you will also have to pay coinsurance. Coinsurance is typically a percentage of medical costs that a person pays after meeting their health plan’s deductible. However, coinsurance for Part A is a flat-dollar amount rather than a percentage that you pay for specific services. For the first 60 days of inpatient hospital care, for example, there is no coinsurance. However, you will typically pay $400 per day (in 2023) for the 61st through 90th days of hospitalization, and more after that.

Part B

Part B is medical insurance. It covers doctor visits, as well as other medically necessary services and supplies. This includes preventive services or healthcare to prevent illness. As are ambulance services, durable medical equipment, mental health coverage, and a few types of outpatient prescription drugs.

Part B has out-of-pocket costs, including a monthly premium, an annual deductible, and coinsurance. In 2023, the monthly premium for Part B starts at $164.90. Individuals with adjusted gross incomes (AGIs) of more than $97,000 and married couples filing jointly with AGIs of more than $194,000, will have to pay higher premiums.

In 2023, the deductible for Part B is $226. As with private insurance, you will have to pay that amount out-of-pocket for medical expenses before Part B will start paying for your services.

Once you’ve met your deductible, you will also generally be required to pay coinsurance. Which is the 20% of the Medicare-approved amount for services and supplies.

Part C

Part C, also known as Medicare Advantage, is a type of health plan provided by private insurance companies. It includes the benefits of Parts A and B, as well as Part D. If you choose to go with Part C instead of Original Medicare, you will still have to pay your Part B premium. As well as any additional premiums owed, to your insurer. 

Medicare Advantage plans tend to be either HMOs or PPOs. They only provide coverage in specific geographic areas. They generally require pre-authorization and referrals, and charge copays and coinsurance for the majority of healthcare services. These plans may include additional coverage, such as cost-sharing for vision, hearing, and dental care.

In contrast to Original Medicare, Medicare Advantage plans have an annual cap on out-of-pocket expenses. In 2023, that amount is $8,300, meaning that is the most you will ever be required to pay out-of-pocket in a year. 

Part D

Part D covers the cost of prescription drugs, both generic and brand name. These plans are provided by private insurers and have a monthly premium of $31.50 in 2023. Beneficiaries with higher incomes, though, will pay more.

Medicare Supplement Plans

Medicare Supplement Plans are private health insurance policies that you can purchase to help pay your share of the costs not covered by Parts A and B. This includes deductibles, coinsurance, and some healthcare coverage if you travel outside of the United States. Long-term care, prescription drugs, dental, vision, hearing aids, or private nursing care are not covered by Medicare Supplement Plans.

In most states, there are ten different types of Medicare Supplement Plans on offer. The plans are lettered, like Medicare parts:

• Plan A – Plan A is the most basic plan available. But even though it’s basic, it will cover what is arguably the most important thing that Medicare Supplement Plans cover: the 20% of outpatient treatments that Medicare does not cover. All Medicare insurance carriers have to offer Plan A, but some states do not require insurers to offer this plan to people under the age of 65 who are on Medicare disability.
• Plan B – Plan B covers everything that Plan A does, plus the Medicare Part A hospital deductible.
• Plan C – This is one of the most complete Medicare Supplement Plans available. Plan C covers everything except Medicare excess charges. This means that it covers both your Parts A and B deductibles, as well as the 20% coinsurance you would normally owe for all outpatient treatment.
• Plan D – Plan D covers the majority of medical expenses, but does not cover the Part B deductible or any Medicare excess charges.
• Plan F – Plan F has long been the best-selling plan on the market. It covers all of your out-of-pocket expenses, meaning you’ll only pay your monthly Plan F premium if you have this plan. The only catch is that Plan F is not available to anyone who became/becomes eligible for Medicare after 2020. If you became eligible before 2020, you can purchase one of these plans. Or if you have already purchased Plan F and are grandfathered in, you can keep it as long as you want.
• Plan G – If you like the sound of Plan F, but are not eligible to purchase one of these plans, look into Plan G. This plan covers everything that Plan F does, except for your Part B deductible. And the good news is that Plan G premiums are frequently very competitive, making these plans a better value than Plan F.
• Plans K, L, and M – These plans all cover various percentages of what the other plans cover. They do not cover Part B deductibles.
• Plan N – This plan offers lower premiums in exchange for copays for certain services, such as doctor and emergency room visits. It does not cover Medicare excess charges.

To purchase a Medicare Supplement Plan, you must already have Parts A and B. Medicare Supplement Plans are not compatible with Part C aka Medicare Advantage; you must choose one or the other.

What Isn’t Covered by Medicare

There are certain things that Medicare does not cover. For example, long-term care, also known as custodial care, is the most significant potential expense that is not covered. Medicaid, the other federal healthcare program, pays custodial costs, but is typically only available to those with low income and little savings. 

Other common expenses that aren’t covered include: 

• Hearing aids and fittings for hearing aids
• Eye exams and eyeglasses
• Dentures
• Most dental care
• Most foot care, unless related to diabetes or medically necessary due to injury or disease
• Medical care overseas
• Cosmetic surgery
• Massage therapy

How to Enroll in Medicare

When and how you enroll in Medicare depends on whether or not you are receiving Social Security benefits. If you start receiving Social Security benefits at the age of 65, you will automatically enroll in Medicare Parts A and B. Although, if you want Medicare Part D prescription drug coverage, you must enroll on your own; enrollment is not automatic. If you are not receiving Social Security benefits, you will need to enroll in Medicare on your own. If you are applying on your own, you can call the Social Security office or apply online. 

Medicare Enrollment Periods

As we stated above, if you are already claiming Social Security or qualify due to disability, you’ll be automatically enrolled in Parts A and B when you turn 65. Otherwise, you must proactively enroll yourself. If you are enrolling on your own, you have to be careful: if you don’t do so during a certain time frame, you will face penalties. 

Here’s when you can enroll:

• Your Initial Enrollment Period – This is the seven-month period surrounding your 65th birthday, which includes the three months preceding your birthday month, your birthday month, and the three months following your birthday month.
• General Enrollment Period – If you do not apply during your Initial Enrollment Period, you will have to wait until the following year’s General Enrollment Period, which runs from January 1 to March 31. Coverage will begin the month after you sign up, and you may have to pay a penalty for enrolling late.
• Special Enrollment Period – This is a time when you can join Medicare or change your coverage based on certain life events, such as leaving a job or moving out of your current plan’s coverage area. If a life event triggers a Special Enrollment Period, you will not have to pay a penalty for not enrolling during your Initial Enrollment Period.

If you want to change your coverage at some point after you enroll, you can do so during the annual Medicare Open Enrollment Period, which runs from October 15 to December 7 each year. If you have Medicare Advantage, you can also make changes during Open Enrollment, which runs from January 1 to March 31 each year.

FAQ

• Do I have to switch to Medicare if I already have private insurance?

This depends on factors such as whether or not you have insurance through the Marketplace or your employer. When you have health insurance through the Marketplace or another private insurer, and are eligible for premium-free Part A, you should enroll in Medicare Parts A and B as soon as you are eligible. If you are not eligible for premium-free Part A, you can keep your individual coverage. Which may be less expensive than Part A.

Although, if you have insurance through your employer, it depends on the size of the company you work for. If your employer has fewer than 20 employees, you should sign up for Part A and Part B when you first become eligible. This is because Medicare will become your primary insurer and will pay your eligible healthcare costs before your other coverage picks up the rest.

If your employer has 20 or more employees and has a group health plan, you may be able to postpone enrolling in Parts A and B without paying a penalty. 

• Can I keep my doctor when I switch to Medicare?

If you have Part B coverage, you can see any healthcare provider who accepts Medicare and accepts new Medicare patients. But not all providers accept Medicare as payment in full. 

Medicare categorizes doctors and other providers in 3 ways:

• • Participating – These providers accept Medicare and the Medicare-approved payment for services.
  • Nonparticipating – These providers accept Medicare, but may charge more for services than Medicare’s approved payment.
  • Opt-out – These providers do not accept Medicare, so patients will be responsible for all costs.

The best thing to do is speak with your doctor and see which category they fall into.

• Do I have to be on Social Security to get Medicare?

Millions of retirees rely on Medicare for healthcare, and on Social Security as a primary source of income. While the two programs are linked, participation in one is not always required for enrollment in the other. 

• Does Medicare cover funeral and burial costs?

No, it does not cover funeral or burial expenses. Social Security does provide a survivor’s benefit. Which is a one-time payment to the worker’s beneficiary that covers funeral expenses.

Let EZ Help

Medicare is great, but it can also seem complicated. However, there are choices you’ll need to make when it comes to your healthcare, even after you enroll. Don’t be afraid to ask questions! Speak to an EZ agent who can explain everything to you and tell you what you need to do to sign up. EZ can assist you in enrolling, purchasing a Medicare Supplement Plan, or simply weighing your options. Our agents work with the best insurance companies in the country. They can provide you with a free comparison of all available plans in your area. We will go over your medical and financial needs with you and help you find a plan that meets all of your requirements. To start, simply give one of our licensed agents a call at 877-670-3602.