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This video will cover the basics of Medicare: Part A and Part B (called Original Medicare, and Part C and Part D.
Medicare Part A is Hospitalization. Think of the "A" as "admission" to a hospital. It has a $1,288 deductible per 60-day benefit period, so for the first 60 days, this will be your only cost. If you have a long hospital stay over 60 days, you will incur a co-pay of over $300 per day, and after 90 days, even more. It's important to note that if you go are admitted then released, and more than 60 days go by, and you are admitted again within the same calendar year, you will incur this $1,288 deductible again. This is one reason why some people buy a Medicare supplement: it will pay this deductible and these co-pays for an additional 365 days. Part A also covers hospice, skilled nursing (up to 20 days in full but a supplement covers up to 100), and home health care.
Medicare Part B is Medical coverage. This covers 80% of Medicare-approved charges for doctor visits, lab tests, bloodwork, x-rays, CT scans, MRIs, PET scans, outpatient procedures, chemotherapy, dialysis, etc., after an annual $166 deductible.
If you are working when you turn 65, you may be able to delay your Part B enrollment. You should check with your company's benefits administrator to make sure you have creditable coverage. For most employer groups with 20 or more employees, Medicare coverage is secondary.
Part B has a cost, part A does not, but there are exceptions to both. If you or your spouse have paid into the Medicare system as an employee, then Part A is $0, Part B is $121.80/mo. Part B costs more for high income earners, and less for those who qualify for assistance from their state.
If you are already drawing Social Security, you will be automatically enrolled into Medicare Part A and B, and they will draw the Part B premium out of your Social Security deposit each month. If not, you will have to enroll in it either online or in person at a local Social Security office, and they will invoice you for it every quarter. You can also set up a monthly bank draft.
If you do not have creditable group coverage and don't enroll into Part B within 3 months after your birth month, you will incur a permanent late enrollment penalty later, and have no medical benefits now. We will show you how to enroll in another video.
Medicare Part C is Medicare Advantage, and is only available through an insurance company's Medicare approved plan. When you enroll into Medicare Advantage, you are now electing to receive your Medicare benefits through an insurance company. This means you will now be in either an HMO or PPO provider network. Many HMO plans require referrals to see a specialist. You will have co-pays and cost sharing for most services. Generally, these plans have lower premiums than Medicare Supplements, and some have $0 premium. Medicare reimburses these plans directly a set amount each month for each member enrolled, which is why they can be offered to you at a low cost, but you need to really understand what you are getting.
Doctors can come and go from the networks, and these plans can change annually. Most PPO plans have a higher cost to you if you go out of network for services.
You must have both Part A and Part B to enroll into any Part C plan. The enrollment period for Part C generally coincides with your initial enrollment window into Medicare (7 months, starting three months prior to your 65th birthday month). You can also change plans annually during the Annual Election Period (AEP), from October 15th to December 7th each year.
Part D is a stand-alone Prescription Drug Plan, or PDP. These are also offered and administered by insurance companies. There is a monthly premium which varies from plan to plan. Also, the co-pays can vary, and the list of covered drugs, the formulary, isn't the same across all plans. The PDP that you choose should be based on what medicines you are taking, and in another video we will show you how to choose the right plan.
Those who have a Part D plan are considered to be on Original Medicare, and many will also buy a Medicare Supplement. You cannot have a Part D and a Part C together. They are mutually exclusive. But, many Part C plans include prescription coverage, and these are called MAPD plans. If you do not have creditable drug coverage, you will need to choose a Part D plan when you first go onto Medicare, or face a penalty later when you enroll.
We will cover this in another video. Please give us a call at 1-888-832-3132 or visit us at http://saferetirements.com/.