This is a step by step guide talking you through everything you need to know about Medicare in 2021
Medicare is a Healthcare Insurance system provided by the federal government and is part of the Affordable Care Act.
Step 1 – What are your options?
There are three parts to the Medicare provision, available on two different plans.
The three parts are Part A, B, and D.
Part A covers hospital insurance. This covers overnight stays in hospital, inpatient care, care in nursing homes (particularly specialist care), and other forms of personal care that needs to be provided by healthcare professionals.
Part B covers medical insurance. This includes most types of outpatient care, doctors’ visits, and medical supplies. This also includes preventative care.
Part D covers prescription medication. This includes any prescribed medications, as well as most shots and vaccines.
Part D is slightly more complicated as Medicare’s prescription coverage is quite complex. Different Pharmaceutical companies have unique formulas for common drugs. Medicare does not cover every type. Instead, it ranks the medication in tiers and only covers a few levels of the tiers. More information on what is covered can be found on Medicare’s website.
Medicare Original vs Medicare Advantage
There two different plans available from Medicare: Original and Advantage.
This plan includes plans A and B. Plan D can also be added if the user wishes. This plan does not cover dental, vision, or hearing. It also does not cover traveling abroad.
Original customers are required to pay a deductible at the beginning of the year. Out-of-pocket costs are roughly 20% before coverage kicks in. It is possible to combine Medicare with Medigap style supplementary cover.
This is a newer and more advanced plan than Medicare Original. This is a plan that includes A, B, D, dental, vision, and hearing cover. It also covers international travel.
Out-of-pocket costs for the Medicare Advantage plans are calculated on an individual basis. Some may be much higher than others. It is possible to combine Medicare with a Medigap style supplementary cover.
Medicare Advantage is available on a year-long contract. If there are any changes to your health or lifestyle you must inform Medicare before renewing your contract.
Step 2 – What are You eligible for?
The following groups of people qualify for Medicare Healthcare:
- People with End-Stage Renal Disease
- Members of the public who are over the age of 65
- Young people with certain disabilities
Some people are eligible to receive their Plan A coverage for free, whilst everyone must pay for Plan B coverage.
Who is available for free Plan A cover?
There is a small list of people who can apply for free Plan A coverage from Medicare.
This list includes people with End-Stage Renal Disease (ESRD – this is when the kidney has failed and a transplant is needed or the patient will have to spend the rest of their life permanently on dialysis. If you are under 65 the other things that will qualify you for free Plan A cover are certain disabilities (for more information see here) or have received 24 months of Social Security or Railroad Benefits.
If you are over 65 there are two ways to qualify for free Plan A cover. You must either be currently receiving Social Security or Railroad Retirement Benefits or eligible for them (but not yet claiming).
It is possible to buy Plan A cover if you do not fall into any of these categories.
Step 3 – What do the plans cost?
How much do Plan A and B cost?
Plan A costs – Plan A prices depend on how long you have been paying Medicare taxes.
If you have paid them for less than 30 quarters then the cover will cost you $458 a month. IF you have paid these taxes for longer than 30 quarters then you will only have to pay $252 a month.
Plan B costs – Everyone pays for Plan B and everyone pays the same rate. This rate is $144.60 a month.
If you have earned over a certain amount in the last 24 months then you may have to pay an Income Related Monthly Adjustment Amount (IRMAA) on top of your premium.
Step 4 – Will you need any Supplementary Insurence policies?
Whilst Medicare medical bills are significantly lower than private healthcare bills many people find that they still need the help of a Medigap style cover to help with out-of-pocket expenses.
The supplementary cover is designed to help pay for the out-of-pocket charges, reducing them to next to nothing.
This type of cover must be purchased separately from Medicare. This review of Accendo Medicare supplement insurance plans will give you a good understanding of what you should be looking for when it comes to supplementary care.