Today I Learned...

Key Takeaways:
  • Medicare is split into Parts A, B, C & D. Each Part covers different parts of Insurance.
  • You can opt for original medicare or medicare advantage plans.
  • There are programs that can reduce your medicare costs.

edicare is a federal health insurance program for people who are 65 or older, regardless of income, medical history, or health status. Medicare has four parts:

Overview of Medicare Parts A, B, C, and D

Part A – Hospital Insurance:

Part A covers hospital expenses such as inpatient stays, skilled nursing care, home health services, and hospice care.

Part B – Medical Insurance:

Part B covers doctors’ services and outpatient care. It also pays 80 percent of the costs of many lab tests, x-rays, and other diagnostic procedures. Medicare patients who have Medigap or Medicare Advantage plans may also pay 20 percent of their bills out-of-pocket (after meeting their deductibles).

Part C – Medicare Advantage Plan:

Part C refers to the Medicare Advantage program. Beneficiaries can enroll in a private health plan, such as an HMO or PPO, and receive all Medicare-covered Part A & B benefits. They also may receive Part D benefits.

Part D – Prescription Drug Coverage:

Part D provides drug coverage through private plans, including standalone prescription drug plans and Medicare Advantage options that provide prescription drugs

The Part D benefit provides coverage for enrollees’ drug costs and helps cover very high expenses. Additional financial assistance is available to beneficiaries with low incomes and modest assets (Source: KFF).

How does Medicare work?

Original Medicare

Original Medicare includes Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance).

You pay for services as you receive them. For each service, you have to pay a deductible up-front at the beginning of the year and also 20% coinsurance on costs that Medicare doesn't cover. If drugs are needed to treat your condition, then separate "Part D" drug coverage is needed.

Although Medicare covers most costs for covered health care services and supplies, there are still some gaps in coverage. Medicare Supplement Insurance (Medigap) can help pay some of the costs that Medicare does not cover, like copayments and coinsurance.

Medicare Advantage

Medicare Advantage is a health plan from a private company that provides an alternative to Original Medicare.

These plans include Part A, Part B, and usually Part D. These plans may offer some extra benefits that aren't offered by Original Medicare—like vision or dental coverage.

Medicare Advantage Plans must follow Medicare’s coverage rules and provide you with notice of any changes before the start of the next enrollment year.

Get help with your Medicare costs.

Reduce costs for Parts A and B

Medicare Savings Programs can help low-income individuals pay their Part B premiums. Some of these programs may be able to assist those who are not eligible for free Part A with paying the premium on that portion as well, covering deductibles and copayments in some cases.

To qualify for a Medicare Savings Program, your income and assets generally must be below certain limits. This varies by state.

These programs can assist those who are enrolled in Medicare but don't qualify for Medicaid:

  • The Qualified Medicare Beneficiary Program - pays your premiums, deductibles, coinsurance, and copayments for parts A and B and Medicare Advantage plans
  • The Specified Low-Income Medicare Beneficiary Program - pays Part B premiums.
  • The Qualifying Individual Program - pays Part B premiums with a slightly higher income limit than the Specified Low-Income Medicare Beneficiary Program.

If you qualify for any of the three Medicare Savings Programs, you are automatically eligible for Extra Help. This helps cover Part D prescription drug plan premiums and out-of-pocket costs.

Medicare can be complex, but there are lots of resources to help you navigate it!

We hope this breakdown has given you a better understanding of how the Medicare program works. By understanding how each part of Medicare works and what it covers, you can make sure your needs are met—and maybe even save some money!

Learn more by taking GetSetUp's Medicare class series. These classes cover Medicare costs, dates you need to know, choosing a medicare advantage plan, understanding medicare supplement plans and more! 

Check out the classes here: Medicare Resources.

Oct 28, 2022