Obtaining apt and affordable Medicare coverage is a vital step taken for the proper planning of retirement Thus, residents of America who are 65 years of age or older must include Medicare in their healthcare conversation. Medicare is the national health insurance plan designed for citizens of the United States age 65 or older. Besides them, even some disabled citizens are also eligible for Medicare plans. People eligible for Medicare in most of the cases must enroll and currently, more than 60 million people in the U.S. are enrolled in Medicare. Americans residents of age 65 or older should have a complete understanding of Medicare and how they can obtain the best and most cost-effective coverage. Many retired and senior persons are seen confused about whether they need all four parts of Medicare or not. Besides they are also apprehensive about Medicare costs, supplemental insurances and enrollment periods.
Types of Medicare Plans
Seniors need to understand that there are four parts to Medicare, Part A, B, C, and D and each Medicare plan covers different healthcare needs. Some of the Medicare plans are mandatory and others are optional. The four types of Medicare plans include:
Medicare Part A or Hospital Insurance
Medicare Part A is also known as hospital insurance and covers hospitalization costs. People enrolling in Medicare automatically receive Part A and for most of the people there is no monthly cost but there is a $1,408 deductible. Healthcare services covered under Medicare Part A include doctor visits, tests, surgeries, inpatient hospital care, home healthcare services, hospice care, and inpatient care in a religious non-medical healthcare institution. Part A covers in-home hospice care but does not cover a stay in a hospice facility. Besides, in case of hospitalization people have to pay a deductible and if they stay for more than 60 days then they are liable to pay a part of each day’s expenses. People who need hospitalization multiple times during a year are required to pay a deductible each time.
Medicare Part B or Medical Insurance
Medicare Part B coverage includes a long list of medical services like doctor’s visits, medical equipment, outpatient care, outpatient procedures, the purchase of blood, mammograms, cardiac rehabilitation, and cancer treatment. It includes all medically necessary services or supplies that are essential to diagnose or treat a medical condition and also cover preventive services. Individuals who don’t have creditable coverage from an employer or through a spouse’s employer are required to enroll in Part B. Individuals enrolled in this plan pay a monthly premium of $144.60 in 2020. People who are enrolled on Social Security their premium amount will be deducted from their monthly payment.
Medicare Part C or Advantage Plan
Medicare Part C is also known as a Medicare Advantage plan and is an alternative way to obtain traditional Medicare coverage. Medicare Part C coverage includes all Part A and Part b coverage and some of the Advantage plans include Part D coverage too. Besides these, Advantage plans include some additional coverage too like vision, dental, hearing aids, and wellness services. Medicare Part C plan is offered by private insurance companies, which collect Medicare payments from the federal government. Depending upon the Advantage plan an individual chooses, he/she may or may not need to pay an additional premium for their Part C coverage. Though this plan is not mandatory for all but people who wish to obtain Part A, B, and D coverage in a single plan will prefer this plan.
Medicare Part D or Prescription Drug Plan
Medicare Part D or a prescription drug plan that helps people cover the cost of prescription medications, however, these plans do not include medical coverage. Since prescription drug cost is not included in the Medicare Part A and Part B, so people need to enroll in Part D plan to include coverage for their prescription drugs. Medicare Part D plans are offered by private insurance companies and therefore every Part D plan comes with its premiums, deductibles, co-payment, coinsurance, and drug formulary. Medicare Part D plans also have a coverage gap, which is a temporary limit on what the plan will cover often called a doughnut hole. This comes in after insured have spent a certain amount and once they reached the level, they have to pay a co-payment for their prescription drugs.
All four parts of Medicare have an enrollment period during which people should enroll in Medicare plans. People should be aware of the different enrollment period and their significance:
Initial Enrollment Period
Initial Enrollment Period for all four parts of Medicare begins three months before the month in which people turn 65 years of age and lasts until the end of the third month after their birthday month, which is a total of seven months period. People who fail to sign up during this Initial Enrollment Period can sign up between January 1st and March 31st each year for coverage that begins July 1st. People who are unable to sign during the Initial Enrollment Period could have to pay higher premiums permanently unless they qualify for a Special Enrollment Period.
Special Enrollment Period
Individuals who are covered under a group health plan provided by their employer or covered under their spouse when they turn 65, may qualify for a Special Enrollment Period. Generally, the Special Enrollment Period requires individuals to enroll in Medicare no later than eight months after their group health plan or their employer-based plan ends. One thing people should know here that if their group health plan or employer-based plan ends during their initial enrollment period then they do not qualify for a Special Enrollment Period.
Other Enrollment Periods
Besides the above two enrollment period, there is an open enrollment period for Medicare Advantage and Prescription Drug Coverage each year, that starts from October 15th and ends on December 7th. Individuals should also be aware that there is also a new annual Medicare Advantage open enrollment period, from January 1st to March 31st, during which they can switch to traditional Medicare from a Medicare Advantage plan and can even join a Medicare prescription drug plan to include drug coverage.
Most of the U.S. residents pay quite a good amount into the Medicare system during their working lives that they do not require to pay for their Medicare Part A coverage. However, the 2020 standard monthly premium for Medicare Part B coverage is $144.60, which is paid by the majority of the people in the country. Some of the individuals might have to pay more than this standard amount if their income in 2018 was exceeding a certain amount. Even some of the Medicare Part C plans also do not charge a premium but other costs such as co-payments for doctor visits and other services might include. Medicare Part D plans come with a monthly premium that varies depending upon the plan chosen by the individual and the drugs used by them.