Understanding Part A, B, C, D Medicare may not sound easy. However, with the right words and tools, anyone can get a full grasp at it. Quite frankly, Medicare can be a little scary when someone is entirely new to it. Most of their adult lives are spent on working for an employer who selects the insurance for them. Majority never get to choose the plan they are involved in. Once they hit 65, they become clueless about Medicare.
Learning about the differences between Part A, B, C, D Medicare can be complex. Knowledge of it is essential especially the methods of getting Medicare coverage. Everyone must know the words, and comprehend the main ideas. Keep reading to know every piece of primary information about Medicare.
What is Medicare?
Medicare is a federal health insurance program. It is for people aged 65 or older, and people under 65 with certain disabilities. In addition, it is for people of any age with end-stage renal disease (ESRD). This disease is permanent kidney failure that requires dialysis or kidney transplant.
The Centers for Medicare & Medicaid Services is the federal agency that manages Medicare. Also, Social Security is part-funding the program. Medicare exists from the taxes an individual pays from their income. It is then part-funded through premiums. In fact, these premiums are from people who pay Medicare and also funded through the federal budget.
Some employees also decide to enroll in a Part C Medicare. It is also called Medicare Advantage Plan. Likewise, they may enroll in a Part D Medicare or Medicare Prescription Drug Coverage. Both Plans will be explained further.
It is crucial to make sense of Part A, B, C, D Medicare. In addition, one must know what and how to choose the program. Their choices may affect their finances. Therefore, everyone must know how to choose and who to get it from. Most importantly, it affects where they may receive health care.
What Are The Four Parts Of Medicare?
The four parts of Medicare are: Part A Medicare, Part B Medicare, Part C Medicare and Part D Medicare. These different elements of Medicare help in covering distinct services.
Correspondingly, it is vital to distinguish the differences between Original Medicare, and Part C Medicare. Seniors or any eligible patients can choose how to get their Medicare coverage. They may choose either Original Medicare or Medicare Advantage Plan. Likewise, both coverage have Part A Medicare and Part B Medicare.
The federal government administers Original Medicare directly. This is how most people get their Medicare. It has two parts: Part A Medicare and Part B Medicare.
Part A Medicare (Hospital Insurance)
Also called Hospital Insurance, it helps cover the basic healthcare. These include inpatient care in hospitals and skilled nursing facility. In addition, there is hospice care and home health care.
Skilled nursing facility (SNF) care and rehabilitation services provide continuous care. They are a nursing facility that provides care on a daily basis. Hospice care is a special way of health care. The facility caters terminally ill people. The hospice care involves a team-oriented approach. They address medical, physical, emotional, and spiritual needs of a patient. In addition, Hospice provides support to the patient’s family or caregiver.
Home health care services are given based on the doctor’s decision. The doctor decides when the patient may receive health care in their home. Also, the doctor establishes the plan of health care. Medicare only covers home health care on a limited basis as prescribed by the doctor.
Part A Medicare is free for most people. Of course, it becomes free when the individual has paid Social Security Taxes. These taxes refer to the ones paid for about ten years. The individual will pay an added monthly premium if they have worked and paid taxes for a shorter time.
Part B Medicare (Medical Insurance)
Part B Medicare is also called Medical Insurance. This helps cover certain services anyone can get from doctors and other health care providers. It also includes home health care, and outpatient care. In addition, it covers laboratory tests, x-rays and mental health care. Moreover, durable medical equipment and some preventive services are covered in this plan.
Part C Medicare (Medicare Advantage Plan)
Medicare Advantage Plan or Part C Medicare is another method of getting coverage. It is run by Medicare-approved private insurance companies. The plan includes all benefits and services covered under Part A Medicare and Part B Medicare. Further, they can provide all benefits and services with different rules, costs and restrictions. Also, they usually include Medicare prescription drug coverage or Part D Medicare.
Anyone can automatically enroll in Part C Medicare especially when they have health coverage. This health coverage could be from their union, former, or current employer. The insured may also decide to stay with the plan. Otherwise, they can switch to Original Medicare. Moreover, they may enroll in a different Medical Advantage Plan. However, they must consult with their union/employer before doing anything else.
Part C Medicare is where the policy entitles private health insurance companies to provide Medicare benefits. Examples of these private companies are Health Maintenance Organizations (HMO), and Preferred Provider Organizations (PPOs). It could also refer to Private Fee-for-Service Plans, and Special Needs Plans and Medicare Medical Savings Account Plans.
One may be required to pay more or all of the costs. This occurs when one decides to use a provider outside of their union’s provided network. In addition, there are co-payments or co-insurance for covered services. Lastly, they may pay a monthly premium in addition to Part B Medicare.
Part D Medicare (Medicare Prescription Drug Coverage)
Let’s take a look at the basics of Part D Medicare. It is also called Medicare Prescription Drug Coverage. This plan covers the cost of prescription drugs. Like Part C Medicare, this plan is run by Medicare-approved private insurance companies.
This is the plan that adds drug coverage to Medicare. An individual pays an additional monthly premium to include this coverage. Again, this is apart from Part B Premium. Significantly, this covers and lowers the drug costs. Also, it helps protect them against higher medical costs in the future.
Part D Medicare is added coverage to Original Medicare or other Medicare Cost Plans. Medicare-approved insurance companies and other private companies provide these plans. One may get a Part D Medicare through their Medical Coverage Plan. Only if their plan offers drug coverage. Otherwise, they may join a separate Medicare Prescription Drug Plan.
It is important to join a Part D plan when one becomes eligible. Also, do this when one does not have other credible prescription drug coverage. They may have to pay a late enrollment penalty if they choose to join later.
Credible prescription drug coverage is prescription drug coverage. This is from an employer or union. They are expected to pay an average at least as much as the Medicare Standard Prescription Drug Coverage.
Original Medicare or Medicare Advantage Plan?
Seniors have two choices. They either select Original Medicare or Part C Medicare. The two basically have a few differences. Remember that Original Medicare and Medicare Advantage Plans cover Part A Medicare and Part B Medicare. In fact, Medicare directly provides for Original Medicare. An individual may have the choice of hospitals, doctors, and other health care providers that accept Medicare.
With Medicare, everyone gets to choose how they get their coverage. They may choose Original Medicare which includes Part A and B coverage. Further, if they want Prescription Drug Coverage, they must join a separate Part D Medicare.
Original Medicare only pays 80% of bills such as doctor visits and hospital fees. They pay the rest of the 20%. For others, they buy a Medicare Supplement from private companies for additional monthly costs to fill in the gap. Generally, any supplemental coverage pays co-insurance and deductibles. They also usually pay a monthly B premium.
Others may choose to join a Part C Medicare (Medicare Advantage Plans). Part C Medicare also includes Part A and B coverage. In fact, Part C plan may include Medicare prescription drug coverage. This coverage involves private insurance companies such as Aetna, Humana, etc. They pay for services directly to the doctor and hospital visits contrary to the government.
These plans usually already include the Part D Medicare such as drug plans, vision, and dental. It is also known as the all-in-1 plan. The only disadvantage is they can only see doctors and hospitals in the specific network.
Medicare Supplement Insurance Policies (Medigap)
Recall that Medicare pays only about 80% of health care costs. Medicare Supplemental Insurance or Medigap is a different policy. This pays the rest of the 20% of the doctor/medical bills. Medigap is offered by private companies to fill in the gaps of Original Medicare.
An individual may pay a monthly premium for Medigap. Usually, it is additional premium to Part B. The average cost could only be $150-$350 per month. Further, the costs could vary between policies ad companies.
The insured may receive the same coverage through a union or employer. However, one must take note that Medigap policies do not work with Medicare Advantage Plans. In fact, it is illegal for someone to sell a Medigap Policy. When a senior or any eligible patient chooses this route with Original Medicare, they have to purchase Part D. The law says so.
A citizen becomes automatically enrolled in both Part A and B coverage with the following circumstances:
- When a person who just turned 65 and gets Social Security or Railroad Retirment Board (RRB) benefits. Then, a Medicare card is mail 3 months before his/her 65th
- People under 65 years old with disabilities. These people automatically get Part A and B Medicare after having disability benefits. The benefits come from Social Security or certain disability benefits from the RRB in 24 months. Then, they receive Medicare card 3 months before their 25thmonth of disability.
- Patients with ALS (Amyotrophic Lateral Sclerosis) or Lou Gehrig’s disease. Also, patients with End-stage Renal Disease (ESRD). Patients automatically get Part A and Part B the month the disability benefits begin.
How can one sign up when they are not automatically enroll?
Not eligible citizens can sign up for Part A once their initial enrollment period starts. The Part A coverage will begin 6 months back from the date they applied for Medicare. However, not earlier than the first month they were eligible for Medicare.
Consequently, they can only sign up for Part B during the times listed below. Always remember that in most cases, one must sign up for Part A and B when they become eligible. If not, they may have to pay a late enrollment penalty.
Initial Enrollment Period
Anyone can sign up during the 7-month period that begins 3 months before the month they turn 65. This includes the month they turn 65 and ends three months after the month they turn 65.
In most cases, their coverage begins the first day of their birth month. However, if their birthday is on the first day of the month, the coverage will begin the first day of the prior month.
The beginning of their Medicare coverage will have delays. When they decide to enroll the month they turn 65 or during the last three months of their Initial Enrollment period.
Special Enrollment Period
They may have the chance to sign up for Medicare during Special Enrollment Period. This happens after their Initial Enrollment Period ends. In some cases, they did not sign up for Part B when they became first eligible. This is because they have coverage under a group health plan based on their current employment.
When this happens, they may sign up for Part A and/or Part B:
- Anytime they still have coverage under their group health plan
- During the 8-month period that initiates the month after their employment ends. It could also be when their coverage ends. Whichever happens first.
Usually, they do not pay a late enrollment penalty when they sign up during a special enrollment period. This period does not apply who are eligible for Part A, B, C, D Medicare depending on having End-Stage Renal Disease (ESRD).
General Enrollment Period
This period arises between January 1 – March 31 each year. Their coverage will not start until July 1 of that year. Also, they may have to pay a higher Part A and/or Part B premium for late enrollment.
What is the Part A late enrollment penalty?
This is when one is not eligible for premium-free Part A, and do not buy when they become eligible. The monthly premium may increase at 10%. Also, they will have to pay the higher premium for twice the number of years they could have had Part A. For instance, when one has been eligible for Part for two years but didn’t sign up, they will have to pay a 10% higher premium for 4 years.
What is the Part B late enrollment penalty?
If one does not sign up for Part B when they become first eligible, they may have to pay a late enrollment penalty for as long as they have Part B. In fact, the monthly premium for Part B may go up 10% for each full 12-month period they could have had Part B.
Now this is just basic information about your Part A, B, C, D Medicare options. You will need more detailed information to make an informed choice. Before making any decisions, learn as much as you can about the types of coverage available to you. We as brokers make sure a senior’s favorite doctor or hospital is in the network. With Medicare Supplement and Original Medicare, there are no restrictions. In fact, they can visit any doctor and hospitals in the nation.