Breaking down the basics & what each part covers.
Whether your 65th birthday is on the
horizon or decades away, you should understand the parts of Medicare – what
they cover, and where they come from.
Parts A
& B: Original Medicare. America created a national health insurance
program for seniors in 1965 with two
components. Part A is hospital insurance.
It provides coverage for inpatient stays at medical facilities. It can also
help cover the costs of hospice care, home health care, and nursing home care –
but not for long, and only under certain parameters.1
Seniors are frequently warned that Medicare will only pay for a maximum
of 100 days of nursing home care (provided certain conditions are met). Part A
is the part that does so. Under current rules, you pay $0 for days 1-20 of
skilled nursing facility (SNF) care under Part A. During days 21-100, a $161
daily coinsurance payment may be required of you.2
If you stop receiving SNF care for 30 days, you need a new 3-day
hospital stay to qualify for further nursing home care under Part A. If you can
go 60 days in a row without SNF care, the clock resets: you are once again
eligible for up to 100 days of SNF benefits via Part A.2
Part B is medical insurance
and can help pick up some of the tab for physical therapy, physician services,
expenses for durable medical equipment (scooters, wheelchairs), and other
medical services such as lab tests and varieties of health screenings.1
Part B isn’t free. You pay monthly premiums to get it and a yearly
deductible (plus 20% of costs). The premiums vary according to the Medicare
recipient’s income level; in 2016, most Medicare recipients are paying $121.80
a month for their Part B coverage. The current yearly deductible is $166. Some
people automatically get Part B, but others have to sign up for it.3
Part C:
Medicare Advantage plans. Insurance companies offer these
Medicare-approved plans. Part C plans offer seniors all the benefits of Part A and
Part B and more: many feature
prescription drug coverage and vision and dental benefits. To enroll in a Part
C plan, you need have Part A and Part B coverage in place. To keep up your Part
C coverage, you must keep up your payment of Part B premiums as well as your
Part C premiums.4
To say not all Part C plans are alike is
an understatement. Provider
networks, premiums, copays, coinsurance, and out-of-pocket spending limits can
all vary widely, so shopping around is wise. During Medicare’s annual Open
Enrollment Period (Oct. 15 - Dec. 7), seniors can choose to switch out of
Original Medicare to a Part C plan or vice versa; although any such move is
much wiser with a Medigap policy already in place.5
How does a
Medigap plan differ from a Part C plan? Medigap plans (also called Medicare Supplement
plans) emerged to address the gaps in Part A and Part B coverage. If you have
Part A and Part B already in place, a Medigap policy can pick up some copayments, coinsurance, and deductibles for you. Some Medigap policies
can even help you pay for medical care outside the United States. You have to
pay Part B premiums in addition to Medigap plan premiums
to keep a Medigap policy in effect. These plans no longer offer prescription
drug coverage; in fact, they have been sold without drug coverage since 2006.6
Part D:
prescription drug plans. While Part C plans commonly offer prescription drug coverage, insurers also sell Part D plans as a standalone product to those
with Original Medicare. As per Medigap
and Part C coverage, you need to keep paying Part B premiums in addition to
premiums for the drug plan to keep Part D coverage going.7
Every Part D plan has a formulary, a list of medications covered under
the plan. Most Part D plans rank approved drugs into tiers by cost. The good
news is that Medicare’s website will determine the best Part D plan for you. Go
to medicare.gov/find-a-plan to start your search; enter your medications and
the website will do the legwork for you.8
Part C & Part D plans are assigned
ratings. Medicare annually rates
these plans (one star being worst; five stars being best) according to member
satisfaction, provider network(s), and quality of coverage. As you search for a
plan at medicare.gov, you also have a chance to check out the rankings.9
Taylor McClish may be reached at (503) 239-3060 or taylor.mcclish@cunamutual.com.
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Citations.
1 - mymedicarematters.org/coverage/parts-a-b/whats-covered/
[6/13/16]
2 - medicare.gov/coverage/skilled-nursing-facility-care.html
[6/13/16]3 - medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html [6/13/16]
4 - tinyurl.com/hbll34m [6/13/16]
5 - medicare.gov/sign-up-change-plans/when-can-i-join-a-health-or-drug-plan/when-can-i-join-a-health-or-drug-plan.html#collapse-3192 [6/13/16]
6 - medicare.gov/supplement-other-insurance/medigap/whats-medigap.html [6/13/16]
7 - ehealthinsurance.com/medicare/part-d-cost [6/13/16]
8 - medicare.gov/part-d/coverage/part-d-coverage.html [6/13/16]
9 - medicare.gov/sign-up-change-plans/when-can-i-join-a-health-or-drug-plan/five-star-enrollment/5-star-enrollment-period.html [6/13/16]
06202016-WR-1676