Medicare is the national healthcare system for people over the age of 65 (certain younger people with disabilities and End-Stage Renal Disease also qualify for Medicare). Medicare insurance covers most medical services (both inpatient and outpatient), durable medical equipment, and some medications in limited cases.
Original Medicare’s 2 main components are:
• Medicare Part A – Inpatient Hospitalization Insurance
• Medicare Part B – Outpatient Medical Insurance
In addition, there is a Medicare Part D for prescription drug coverage.
What Does Medicare Part A Cover?
Medicare Part A is often called “hospitalization” or “hospital care” because it covers inpatient care at a hospital, skilled nursing facility (SNF), long-term care hospital (LTCH), and hospice care.
Costs of Medicare Part A
Part A Premium – If you’ve worked 40 quarters (10 years) in the United States, you should be eligible for full Medicare Part A benefits without having to pay a premium (payment). This is because the Medicare taxes you paid during your entire working life go towards covering Medicare Part A.
Part A Deductible – In 2019, the Part A deductible is $1,364, and you must meet this deductible before Medicare begins covering any hospital stays. In addition, in order for Medicare Part A to cover the cost of a hospital stay, you must be admitted and stay two “midnights” minimum. If you meet these two requirements, then Medicare Part A will cover 100% of the expenses associated with a hospital stay for the first 60 days. After that, from day 61 to day 90, you will be responsible for a daily copay of $341 in 2019. If your hospital stay extends beyond 90 days, you will have dip into your lifetime reserve of an additional 60 days in the hospital with a daily copay of $682 in 2019.
The Medicare Part A deductible is not an annual deductible but instead charges a deductible “per benefit period.” A “benefit period” begins the day you are admitted as an inpatient to a hospital or skilled nursing facility and ends 60 days after you have left the facility. You could conceivably pay multiple Part A deductibles in a year.
While in the hospital, there are additional services that may be covered by Medicare Part B and subject to its deductible and 20% coinsurance. Such services could include visits by your doctor, some surgical services, and other services provided by medical professionals not employed by the hospital.
What Does Medicare Part B Cover?
Medicare Part B covers most medically necessary doctors’ services, preventive care, durable medical equipment, hospital outpatient services, laboratory tests, x-rays, mental health care, and some home health and ambulance services.
Medicare Part B is elective coverage, but most Medicare recipients choose to take it because it covers a lot of the day-to-day medical services listed above.
Costs of Medicare Part B
Part B Premium – The monthly premium in 2019 is $135.50/month or more depending on the individual’s annual household income. You can learn more about what your premium might be by visiting the Part B page on Medicare’s website. Individuals with very low income may qualify for coverage of their Medicare Part B premiums through their state’s Medicaid services.
Part B Deductible – Medicare Part B has an annual deductible of $185 in 2019. While the Medicare Part B deductible isn’t too significant, it comes with a 20% coinsurance that does not have a cap. So, doctor’s services for both ongoing required outpatient services (for example, dialysis) and inpatient services for significant surgeries and hospital stays can cost individuals tens of thousands of dollars out-of-pocket. This can prove to be unaffordable and can eat through any savings you might have put away for retirement. At a time when you’re dealing with the stress of a significant medical issue, you shouldn’t have to also worry about the financial implications. To protect against exorbitant medical bills, many people will consider purchasing a private insurance policy called a Medicare supplement insurance policy.
What Does Medicare Part D Cover?
While Medicare Parts A & B have been around since 1966, the Medicare Part D prescription drug plan was first released in 2006. While Medicare Part D is elective coverage, you will likely receive a penalty if you don’t apply for coverage when it is first available to you.
Medicare Part D is a Medicare program that is administered through private insurance companies approved by Medicare. In most states, Medicare enrollees will have access to over 30 Medicare Part D drug plans which can make the process of choosing the best policy a little daunting.
Cost of Medicare Part D Premium & Deductible
Because Part D is administered through many private insurance companies, the costs for Part D coverage are wide-ranging. The Part D monthly premiums and deductibles vary from plan to plan. Different drug plans will have different costs in deductibles, copays, and/or coinsurance. The plans will also cover different medications at different cost tiers.
How to Shop for a Part D Drug Plan
The recommended method for choosing the right Medicare Part D plan is to use Medicare’s Prescription Drug Plan Finder tool. To use the tool, you just need to input your medications (name, the frequency of usage, and dosage). The tool will then give you a list of recommended Part D plans that are the most compatible and affordable based on the medications you currently take. This tool is the best way to ensure that you don’t overspend on your medications.
Sign Up for Medicare Part D Online
If you are interested in or currently have a Part D plan, you can:
• Join a Medicare Part D plan for coverage on prescription drugs
• Switch from one Part D Plan to another Part D plan (during a valid enrollment period)
We have a free, online tool that can help you find, compare, and choose Part D plans. To use this tool, enter your zip code, your local pharmacy, and the medications you are taking. It will automatically generate a list of the best plans for you. You can find this tool by visiting this link.
If you need additional help, you can check out our how-to guide on how to find the right Part D plan for you. It will walk you through the step-by-step instructions on how to use the tool, and help get you to the plan that you need.
Frequently Asked Questions About Medicare
Does Medicare Cover My Test, Item, or Service?
Medicare has provided a resource for you to be able to fairly quickly determine if your medical service, test, treatment or device is covered: https://www.medicare.gov/what-medicare-covers/. You can also call Medicare at (800) 633-4227 (TTY users should call 1-877-486-2048) to speak with a representative or you can talk to your physician’s medical billing department.
Does Medicare Cover Preventive & Screening Services?
Yes. In the past decade, Medicare has expanded its coverage on preventive services. Medicare covers preventive services, such as an annual wellness visit, bone mass measurements, mammography, pap tests, pelvic exams, prostate exams, and many others. You can find additional details on which preventive services Medicare covers by viewing this Medicare Preventive Services chart.
Does Medicare Cover Long-term Care?
Yes. Medicare does cover extended stays in a hospital or skilled nursing facility up to 90 days at a time and then a lifetime reserve of an additional 60 days. Any time beyond this will be your financial responsibility. In order to protect yourself from potentially catastrophic expenses, you might consider acquiring Long-Term Care insurance (LTCi). However, it can be somewhat pricey at $200-300/month, depending on the coverage levels and your age.
What Is NOT Covered by Medicare A & B?
While most medical services are covered by Medicare, there are still plenty of things that are NOT covered by Medicare. For example, Medicare does not cover?
• Medical services outside of the country in most cases
• Most experimental or elective cosmetic services
• Preventative services for dental, vision, or hearing
Does Medicare Cover Dental Services?
No. Medicare does not cover dental in most cases. It doesn’t cover dental care or procedures such as cleanings, fillings, crowns, extractions, and dentures. The only issues Medicare will cover related to dental is if a dental issue causes an infection or if there is catastrophic and traumatic damage as a result of an accident that requires surgery.
Does Medicare Cover Vision Services?
No. Medicare does not cover vision services, such as routine eye exams (also known as “refractions”) for eyeglasses or contact lenses. Medicare will, however, pay for an eye exam and one set of eyeglasses after cataract surgery. In addition, Medicare does cover certain services related to the eyes, including regular preventive exams for glaucoma, cataracts, and other eye conditions. Medicare also covers medical services to treat or correct these conditions. As a general rule, optometrists are not covered (unless after cataract surgery), and ophthalmologists are covered, except for refractions.
Does Medicare Cover Hearing Services?
No. Medicare does not typically cover hearing services, such as hearing exams or hearing aids. As a caveat, Medicare will cover hearings exams if your doctor orders them to determine if you need medical treatment.
Does Medicare Provide Any Death Benefits or Life Insurance?
No. Unfortunately, Medicare does not provide any type of death benefit so you might consider looking into life insurance coverage. There are various types of life insurance to consider such as universal, whole, or term life insurance; however, one of the more popular types of life insurance is called final expense or burial expense life insurance. Because life insurance becomes expensive as you get older, lower face (benefit) amount policies are more affordable and therefore more popular. Burial or final expense life insurance typically comes in benefit amounts of $5-50,000 and has limited underwriting to allow people to more easily qualify. This type of life insurance also typically does not require a physical to be performed.
Benefits of a Medicare Supplement Plan
While Medicare Parts A & B offers strong coverage for basic health needs, it does not cover 100% of your expenses. With only Original Medicare, you will be left with significant gaps in coverage in the form of deductibles, unlimited 20% coinsurance, copays, and excess charges.
A Medicare Supplement plan, also known as a Medigap plan, reduces (or even eliminates) financial exposure to the gaps in Medicare. Medicare supplement insurance plans are private health insurance plans that bridge the gap left by Medicare.
Medigap plans are identified by letters A through N. These Medicare Supplement plans often cost between $100-200/month, depending on your age, gender, tobacco, where you live, and the plan you choose.
Medigap plans are standardized, which means that plans with the same letter offer the same basic benefits, regardless of the price and company you buy it from. For example, Plan F from one company can cost $165/month while Plan F from another company can cost only $130/month. This knowledge can result in a savings of $35/month or $420/year for the exact same basic benefits!
Nothing on this website should ever be used as a substitute for professional medical advice. You should always consult with your medical provider regarding diagnosis or treatment for a health condition, including decisions about the correct medication for your condition, as well as prior to undertaking any specific exercise or dietary routine.