The Centers for Medicare & Medicaid services (CMS) oversee Medicare, which is a federal program. CMS is a part of the U.S. Department of Health and Human Services.
People who are at least 65 years old may qualify for Medicare. To qualify you must be a U.S. Citizen or have lived in the country for 5 consecutive years as a permanent resident. Also, you must have accumulated at least 40 quarters of work or paid into Medicare taxes for 10 years to qualify for part A without a premium.
Those who are under age 65 but on disability for at least 24 months are also eligible for Medicare. If you have End-Stage Renal Disease or Amyotrophic Lateral Sclerosis, you are eligible for Medicare automatically.
Original Medicare consists of two parts, Part A and Part B.
Part A, which is hospital insurance, covers inpatient hospital care, skilled nursing facility, hospice, nursing home care (inpatient care in a skilled nursing facility that's not custodial or long-term care), and home health care.
Part B, which is medical insurance, covers doctor visits and outpatient services such as labs and imaging. Part B also covers durable medical equipment, ambulance services, mental healthcare, and some preventive services.
Some of the items and services Medicare does not cover include:
If you need services that Medicare does not cover, you will have to pay for them yourself unless you have other insurance or a Medicare health plan that covers them.
Part A is usually premium free for most people who meet certain criteria. Part B has a base premium of $148.50 per month for most people, however those with higher incomes may pay more for Part B. Social Security, who administers Part A and B, will let you know what your premium will be for your Original Medicare.
Whether you choose to add on additional coverage or not is ultimately up to you. Original Medicare was never meant to cover everything, and there are significant gaps in what it does cover. Your hospital and medical coverage do require copays, coinsurance and deductibles that have no annual cap when you use this coverage.
Furthermore, neither Part A nor Part B cover prescription drugs. So, if you have prescription costs you may want to consider your options. Although prescription drug coverage is considered optional, you may be liable for a penalty if you did not sign up for it when you were first eligible for Medicare.
Depending on the size of the employer, you may be able to delay Part B without having to pay a penalty. In most cases, you do not need to do anything until you retire, or you lose the employer coverage.
You can sign up for Part A since it is premium-free for most people. However, if you sign up for Part A, you can no longer contribute to a Health Savings Account.
Most people sign up for Part A and Part B in the 7 months surrounding their 65th birthday (3 months before, the month of your birthday, and 3 months after); but some may delay enrollment because they plan on retiring after age 65. On the other hand, those on Social Security Disability for 24 months, or with certain health concerns such as End Stage Renal Disease (ESRD) and Amyotrophic Lateral Sclerosis (ALS) can sign up for Medicare before 65.
If your employer has less than 20 employees, then you may want to consider applying for Medicare at 65 to avoid penalties. Alternatively, if your employer has more than 20 employees, then you may delay enrollment without penalty.
Medicare drug plans have a coverage phase called the coverage gap (also known as the Donut Hole). Not everyone will meet the coverage gap and when you reach it depends on how much you and the plan have paid for your prescriptions. Therefore, those who take higher cost prescriptions are more likely to hit the coverage gap.
After meeting your plan deductible (if applicable), you will pay the copays/coinsurances set by your plan provider until you and the plan have paid $4,130 in drug expenses. It is important to keep in mind that your copay is not the only factor, the plan is also paying an amount towards your prescriptions on their end and the sum of these costs count towards the coverage gap.
Once you and the plan have both paid $4,130 your copays will change because you will have reached the coverage gap. During the coverage gap you will pay a flat 25% of the cost of your drugs until you have paid $6,550 which is the end of the coverage gap.
Once you are out of the coverage gap, you automatically move to catastrophic coverage. During this phase, you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.
No. You must be enrolled in Medicare in order to be eligible to enroll in a Medicare Part D plan, Medigap plan, or Medicare Advantage plan. A Medicare Part D prescription drug plan only requires that you be enrolled in Medicare Part A. However, in order to enroll within a Medigap plan or a Medicare Advantage plan, you must first be enrolled in both Medicare Part A and Medicare Part B.
No, each plan may have a unique list of covered drugs. The list of covered drugs is known as a formulary. Medicare requires all Medicare Part D plans to cover at least two medications in each therapeutic category/class approved by Medicare. The drugs within the formulary are assigned to tiers. The tier determines the co-payment or out-of-pocket costs a person within the plan will pay for the drug. If you take a medication that is not covered on your Part D plan's formulary, you will pay full retail price.
Yes. You will have to pay your monthly Medicare Part B premium to Medicare alongside the monthly premium you pay to your Medicare Advantage plan or Medigap plan.
No. You and your spouse must each enroll in a Medigap plan in order to obtain Medigap coverage.
No. Medicare is a federal health coverage program designed for the elderly as well as individuals with certain qualifying health conditions such as End Stage Renal Disease. Medicaid is a state-run health coverage program primarily targeting low-income individuals within the state.
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