Medicare is a federal program that provides health insurance for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease. There are 4 parts to Medicare.
Part A covers inpatient care:
2020 Part A Deductible: $1,408
Part A is part of Original Medicare. It covers inpatient care as defined below. The annual deductible for Part A is $1,408 in 2020.
Inpatient hospital care
Skilled nursing facility care (SNF)
Home health care
Hospice care
Part B covers 80% of outpatient care
2020 Part B Premium: $144.60
Part B, along with Part A, is part of Original Medicare. It covers inpatient care as defined below. The annual deductible for Part B is $144.60 in 2020.
Outpatient care
Part C is also known as Medicare Advantage or private Medicare.
Medicare Advantage plans help balance cost and coverage.
Original Medicare (Parts A and B) provides inpatient and outpatient coverage. However, the cost without supplemental coverage may be prohibitive depending on your needs. Medigap and Medicare Part C plans are two ways to lower that cost.
Medicare Part C plans, also known as Medicare Advantage, are administered by private insurance companies.
Part C plans are similar to employer plans. The most common are: Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Private Fee-for-Service (PFFs).
Typically, Part C plans include a limit on your out-of-pocket expenses for Part A and Part B. Many Part C plans also include drug coverage. And, some Part C plans offer extra coverage for vision, dental, hearing, and wellness programs.
To learn more about Medigap, click here.
Part C (Medicare Advantage) is NOT the same as Medicare Supplemental (Medigap)
Medicare Part D (drug coverage) helps reduce the price of prescription drugs.
Part D plans:
It's also important to be aware that Part D plans have a coverage gap (also known as the "Donut Hole"). The coverage gap starts when you and your insurance company spend $4,020 on medications and ends when you spend $6,350. Click here to learn more about Part D and the Donut Hole.
Depending on your income, you may qualify for federal or state programs that help further reduce the cost of medications. The federal program is called Extra Help. The New York state program is called EPIC.
There are 4 enrollment periods.
You can enroll in original Medicare online, by phone or in-person
When to enroll
There are 4 enrollment periods.
If you don't sign up for Medicare Part B when you're first eligible, your coverage may be delayed and you will pay a lifetime penalty when you do get Part B.
When to enroll
If you do not receive Social Security or Railroad Retirement Board (RRB) benefits, you’ll need to sign up for Original Medicare. You can do so in 3 ways:
If you receive Social Security or Railroad Retirement Board (RRB) benefit, you will be enrolled automatically.
Medicare Advantage and Supplemental plans are administered by private insurance companies. You can find plans that are available in your area by visiting Medicare.gov.
You should consider your health needs and budget when choosing a plan. If you need help, consult a Medicare broker.
Choosing among Medicare Advantage plans can be confusing: premiums, deductibles, prescription gap coverage-- how do you make sense of them all!? Below are 6 steps to help you choose a plan that meets your needs and budget.
Answers to 7 of the most common questions about Medicare Supplemental plans.
Yes, Medicare Supplemental and Medigap are two terms that can be used interchangeably.
However, be careful not to confuse Medicare Supplemental / Medigap and Medicare Advantage. Medicare Advantage is different.
Medicare Parts A & B (Original Medicare) help cover the cost of inpatient and outpatient care. However, you're still left with sizable copays, coinsurance payments, and deductibles. For example, Original Medicare only covers 80% of a doctor's visit. For this reason 4 out of 5 people on Original Medicare have supplemental coverage either through retiree benefits, Medicaid, or individually purchased Medicare Supplemental Insurance.
There are currently 10 federally standardized Medicare Supplemental plans (A, B, C, D, F, G, K, L, M, N)*. This means that the coverage you receive under each plan is identical no matter from which private insurance company you purchase it.
To be eligible for Medicare Supplemental coverage you must be: 65 or older or be diagnosed with End Stage Renal Disease or ALS or enrolled in Original Medicare (Part A & B).
You're guaranteed to be accepted into a Medicare Supplemental plan during your Medigap Open Enrollment Period (for 6 months after the first day of the month that you’re both 65 years old and enrolled in Medicare Part B.)
In most states, the monthly premium of your Medicare Supplemental plan depends on the plan, your health, where you live, and from which insurance company you purchase the plan.
Good news for New York State residents! The only thing that matters in New York is where you live. Insurance companies are required to accept you into any Medigap plan regardless of your health status or when you choose to enroll.
First choose a letter
Plan F offers the most coverage: if Original Medicare covers a service or procedure, you will pay nothing.
Plan G is the same as Plan F, but you will have to meet your Medicare Part B deductible before the plan's coverage kicks in.
Plan C is the same as Plan F, but it doesn't cover excess charges. Medicare allows doctors to charge up to 15% more than the Medicare agreed upon price. If you see a doctor who has excess charges, you will have to pay these excess charges out-of-pocket under Plan C.
Similarly, Plan D is the same as Plan G, but it doesn't cover excess charges.
Plans A and B do not cover skilled nursing facility coinsurance.
Plans K and L have a 50% (K) and 75% (L) coinsurance for most services. Because you will be paying for most outpatient services, both K and L plans have out-of-pocket maximums.
Plan M only covers 50% of the Part A deductible. This could be costly if you end up having major inpatient services.
Plan N is similar to Plan G, but you will pay $20 for each doctor's visit.
Then choose a carrier
Carriers are not required to offer all plans. So check which plans are offered by which carriers in your zip code. Then, compare prices. Because coverage benefits are standardized, price is the biggest consideration factor. Another factor to consider is the quality of customer service.
No. Medicare Supplemental does not cover prescription drugs. You have the option to purchase a Part D Prescription Coverage plan to help pay for the cost of drugs. It is highly recommended that you enroll in a Part D plan as soon as you're eligible. If you do not, you will pay a late enrollment penalty and may have a gap in coverage.
There are 4 coverage phases for Part D plans.
Some, but not all, Part D plans have a deductible. The deductible can be anywhere from $0 to $435 (in 2020). Every year, you must first meet the deductible before moving onto the second coverage phase-- the Initial Coverage. This means you pay the full cost of your prescriptions until the deductible is met.
Each Part D plan sets its own copays and coinsurance rates for generic and brand name drugs by tier. You will pay these fees until you and your plan spend a total of $4,020.
During this phase you will pay 25% of all generic and brand name drugs until you spend $6,350.
In previous years, the gap was significantly larger. Medicare has narrowed the gap over last few years. However, 25% of an expensive drug can still be a large monthly expense.
Many seniors qualify for additional subsidies. The federal government program aimed at helping senior reduce the price the cost of drugs is called Extra Help. Each state has it own additional program. The New York State program is called EPIC (Elderly Pharmaceutical Insurance Coverage).
Individualswith income less than $75,000 or married couples with income under $100,000 qualify.
In this phase, you will pay 5% of all covered drugs.
Medicare Part D, administered by private insurance companies, provides prescription drug coverage for Medicare enrollees. Extra Help is a federal program that helps pay Part D premiums, copays and coinsurance costs.
If you are enrolled in Medicaid, Social Security Income (SSI), or Medicare Savings Program (MSP), you automatically qualify for Extra Help. If you are not enrolled in one of these programs, you must meet income and assets eligibility requirements.
For Full Extra Help, your monthly income must be under $1,425 (or $1,922, for couple) and your assets must be under $9,230 (or $14,600 for couples). For Partial Extra Help, your monthly income must be under $1,581 (or $2,134, for couple) and your assets must be under $14,390 (or $28,720 for couples).
Full Extra Help
Partial Extra Help
Enrolling in Extra Help eliminates any Part D late enrollment penalty and qualifies you for a Special Enrollment Period (SEP). During SEP you can enroll in a Part D or Medicare Advantage plan.
Enrolling
If you are enrolled in Medicaid, Social Security Income (SSI), or Medicare Savings Program (MSP), you will be automatically enrolled in Extra Help. You will receive a purple-colored notice from CMS notify you of your enrollment.
Otherwise, you can apply online through the Social Security Administration website.
Medicare does not cover long-term care (assistance with activities of daily living). In some circumstance, Medicare covers skilled nursing care, home health care, and hospice care.
One of the biggest misconceptions about Medicare is that it covers long-term care (LTC). Many individuals are shocked to learn that they have to pay for LTC out-of-pocket unless they planned ahead or qualify for Medicaid.
Long-Term Care is care that you need to perform activities of daily living. Activities of daily living include: bathing, dressing, dressing, grooming, using the toilet, eating, getting out of bed, etc. Long-Term Care can be performed in-home, in the community (adult day care) or at a facility (assisted living or nursing home).
How much does Long-Term Care cost?
According to a report published by Genworth in 2019, the national average for:
What does Medicare cover?
In some circumstances, Medicare will cover skilled nursing care, home health care and hospice care.
How can I get Long-Term Care coverage?
Unlike Medicare, Medicaid covers the cost of long-term care. To qualify for Medicaid, you have to meet state specific income and savings requirements. Since Medicaid is a state-run program, Long-term care benefits vary by state. Generally, Medicaid will cover the cost of a nursing homes. Although, many nursing homes do not accept Medicaid patients. In most state, Medicaid will not cover the cost of in-home care or adult day care. New York is one of the few states where Medicaid will cover in-home care and stays in assisted living facilities.
Long-Term Care Insurance is coverage you can purchase from a private insurance companies. Traditional LTC policies provide a fixed daily benefit for nursing home care and limit the benefit period to 3 years. The premium for an LTC policy can change over time. Recently, premiums have been increasing. As a result, fewer and fewer people are buying traditional LTC insurance.
Whole life insurance is an alternative type of long-term care coverage. Whole life insurance will return money to your heir if you don't end up using long-term care. Additionally, you are able to lock-in the premium rate upfront.
Some Medicare Advantage plans are beginning to offer limited long-term care coverage. It's worth checking if there are any plans in your area that do.
Seniors can also use reverse mortgages or qualify for VA benefits that can help pay for long-term care.
Original Medicare does not cover routine dental and vision. Some Medicare Advantage plans provide routine dental and vision coverage. Individuals with Medicare Supplemental plans who want dental and vision coverage can purchase stand alone policies.
According to a report published by Genworth in 2019, the national average for:
What does Medicare cover?
Medicare does not cover most:
But, Medicare Part A (Hospital Insurance) will pay for certain dental services that you get when you're in a hospital.
Vision
Medicare does not cover eye exams (sometimes called “eye refractions”) for eyeglasses or contact lenses. You pay 100% for eye exams for eyeglasses or contact lenses.
However, Medicare Part B covers eye screening in some circumstances:
Options for getting dental and vision coverage
Individuals who are on Original Medicare and individuals who have a Medicare Supplemental can purchase a standalone dental and/or vision coverage from a private insurance company. These plans typically have a monthly premium and a maximum benefit amount.
Another option is a dental discount plan. A dental discount plan is not insurance. Dentists participating in discount plans agree to offer discounts for certain services. Usually, this is a percentage of the total amount.
Medicare Advantage plans (Medicare Part C) often provide routine dental and vision coverage.