Medicare

Medicare is a complicated program that consists of four parts. The government has made it as easy as possible yet we find that most people need help in navigating the options.

 

Part A Hospital Insurance

Premiums – Generally you do not pay a premium for Part A as long you or your spouse have at least 40 or more quarters (10 years) of Medicare covered employment. If not the premium is $411/month

Enrollment – If you are eligible you are automatically enrolled at the age of 65.

Deductible -$1,288 per spell of illness.

Coinsurance –

Hospital:

$322/day for days 61-90

$644/day for days 91-150 (These are lifetime reserve days that can only be used once. You pay 100% of the cost past day 90 if you have used all of your lifetime reserve days.)

Skilled nursing:

$157.50/day for days 21-100

 

Part B – Outpatient Insurance (Physicians, diagnostics, ambulance, etc.)

 

Premiums – In 2016 if you are drawing Social Security your premium is $104.90. If you are New to Medicare in 2016 or you are NOT drawing Social Security your premium is $121.80.  (indexed based on MAGI)

 

How Much You’ll Pay for Medicare Part B in 2016
Single Filer Income Joint Filer Income 2016 Monthly Premium
Up to $85,000 Up to $170,000 $121.80 or $104.90*
$85,001 – $107,000 $170,001 – $214,000 $170.50
$107,001 – $160,000 $214,001 – $320,000 $243.60

Enrollment – Your initial enrollment period begins 3 months prior to the month you turn 65. If you are receiving Social Security you will automatically be enrolled. (See the attached enrollment guide for instructions on how to enroll).

Deductible – $166/year (paid to Medicare). Waived for some preventive services such as flu shots, some mammograms and Pap smears, bone mass tests, prostate screening, diabetes tests, and some others.

Coinsurance

Assigned claims: 20% of Medicare approved rate.

Unassigned claims: 20% of approved rate + balance of actual charge up to an additional 15% of the approved charge.

 

Part C – Medicare Advantage 

A Medicare Advantage Plan is an alternative to original Medicare that may be available in your area. Medicare Advantage Plans sometimes called “MA Plans” or “Medicare Health Plans” are offered by private insurance companies approved by Medicare. These plans may be HMO’s, PPO’s or PFFS (private fee for service plans).

Medicare Advantage Plans, provide all of your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. Medicare Advantage Plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D).

Premiums – $0 – $300/Month depending in the plan(s) available (paid to the insurance company). You still must pay your Part B premium if you elect Medicare Part C.

 

Part D – Prescription Drug Insurance

Premiums – $15 – $180/Month depending on the plan you choose (paid directly to the insurance company that offers the plan you choose).

Enrollment* – Your initial enrollment period begins 3 months prior to the month you turn 65. If you are receiving Social Security you will automatically be enrolled. (See the attached enrollment guide for instructions on how to enroll).

Coinsurance – The coinsurance in Part D varies depending on the plan that you choose. Below is a snapshot of the current standard benefit design (minimum coverage) that all Part D plans have to provide. There are many plans available with better coverage.

 

Coverage Part D plan pays You pay
Annual deductible: $320 $0 $360
Initial coverage period: $3,310 75% of $3,310 25% of $3,310
Coverage gap (donut hole)Starts when total costs exceed $2,960 55% of covered brand name drugs and 35% of the covered generic drugs 45% of covered brand name drugs plus dispensing fee; 65% of covered generic drugs; 100% of rest.
Catastrophic coverage Starts when total out-of-pocket cost reaches $4,850 95% or the drug cost minus the copay Greater of 5% of the drug costs or $2.65 copay for a generic drug or $6.60 for a brand name drug