What is medicare?
Medicare parts A, B, C, D. Most of us have heard the terms mentioned but what does each part actually mean? To explain, let’s get back to the basics first. What is Medicare? Medicare is a U.S. federal health program that is divided into two main parts, Medicare Part A and B. Health-care costs are expensive. As we age those costs tend to increase, to the point that at times it may seem that it will lead you to go broke. Medicare is the response to this need. It is meant to assist seniors, those 65 and older (and for people with certain disabilities) to have medical coverage.
This guide was written to help clear up some of the confusion about Medicare, I am the first to admit that it can be confusing. However, it is an important part of successful retirement planning. Understanding Medicare, the in’s and out’s of what it does and does not cover is very important. It may seem easier at times to put off things we do not want to think about, medical costs and possible future illnesses included, but after reading this guide you will have a better understanding of what your options are.
Medicare can be as simple as the A B C’s, maybe that is why they named the different Medicare parts A, B, C, and D. It’s up to you, and possibly a trusted agent, to gather the information you need to choose the right medical coverage for you. Let’s break down each one.
Medicare Part A: Pays for hospital stays and some home health and hospice care
Medicare Part B: Pays for doctor visits and care. It also covers some other health needs such as flu shots and walkers.
Medicare Part C: Is the Medicare Advantage plan
Medicare Part D: Covers medications prescribed by doctors
Now that we’ve gotten that out of the way let dig a little deeper into what is Medicare parts A and B.
Medicare Part A
Medicare Part A is health insurance provided by the federal government. It was put into place to assist with some of the acquired costs during treatment in a hospital and other inpatient facilities.
Most people do not pay a monthly premium for Part A (fun fact it is also known as “premium-free Part A”). Americans with a work history of 10 years or more, or those married to someone with a 10-year work history will have Part A provided to them free of charge. Although you do not pay a monthly premium, you typically pay a coinsurance for the services you receive.
2022 costs at a glance
|Part A Hospital Inpatient deductible and coinsurance
|$1,556 deductible for each benefit period
|Days 1-60: $0 coinsurance for each benefit period
|Days 61-90: $389 coinsurance per day of each benefit period
|Days 91 and beyond: $778 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
|Beyond lifetime reserve days: all costs
Now that you know about what Part A is. You may be asking how do you sign up for this? Some people will be automatically signed up for this while others should go to https://www.ssa.gov/medicare.com. In most cases, if you are automatically enrolled depends on whether you are getting social security benefits.
Medicare Part B
Medicare Part B is health insurance provided by the federal government. Let’s get through the textbook definition first. Medicare Part B is part of Original Medicare and covers some expenses of medical services and supplies that are medically necessary to treat your health condition. Part B covers things like lab work, doctor visits, and medical equipment.
In contrast to Part A, beneficiaries do have to pay a premium for Medicare Part B. (Standard premium being $170.10 a month in 2022) You want to be sure that you enroll at the right time. Open enrollment begins three months before the month of an individual’s 65th birthday and continues for three months afterward.
Many people choose to receive their Part A and B benefits through Original Medicare. Original Medicare is the traditional Medicare program most of us associate with when we hear the term, where the government pays directly for the health care services you receive.
Prescription Drug Coverage Under Original Medicare
What about drug coverage? If you want prescription drug coverage with Original Medicare, that is where a Part D (PDP) will come in. You will need to join a stand-alone Medicare private drug plan.
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