Medicare is the country’s health insurance program for anyone aged 65 and older or certain people younger than 65 who have permanent kidney failure or qualify due to specific disabilities. Medicare helps with health care costs, but it won’t cover everything. You can either get Original Medicare with Part A and/or Part B or a Medicare Advantage plan using a private insurance company. We’ll touch on what each option covers below.
Original Medicare is the name for the federal program which includes Medicare Part A and Medicare Part B. The federal government manages these programs. With this coverage, you can see any doctor who accepts Medicare assignment.
Part A – Hospital Insurance
Medicare Part A is responsible for paying for inpatient care in a skilled nursing facility or hospital, but it won’t cover long-term or custodial care. This insurance will also pay for some home health care services and hospice care.
There is a $1,556 deductible for Part A in 2022 and a coinsurance. This means that you will pay a portion of each bill. There is no deductible for the first 60 days of inpatient hospital care. However, for days 61 to 90, you’ll pay $389 a day for any inpatient hospital stay.
Most people wouldn’t have to pay premiums for Part A if they or their partner paid a minimum of 10 years of Medicare taxes. Usually, this comes right out of your paycheck with your other taxes. However, if you don’t qualify for premium-free Part A, you’ll pay roughly $499 a month in 2022 for this coverage.
Part B – Medical Insurance
Part B is responsible for paying for medically necessary supplies, services, and doctor visits. It includes coverage for preventative services, durable medical equipment, ambulance services, and mental health coverage for some outpatient prescription drugs.
The monthly premium for Part B starts at $170.10 a month in 2022. If you’re single and your adjusted gross income is over $91,000 or a married couple filing jointly with an adjusted gross income over $182,000, you’ll pay higher premiums. The deducible is $233, and you’ll usually pay 20% of the Medicare-approved amount for any supplies or services you use.
Part C – Medicare Advantage Plan
Medicare Part C or Medicare Advantage Plans are health plans that private insurance companies offer. They give you the same benefits as you’d get with Original Medicare, but they often include Part D coverage for prescription drugs. In addition, you have to pay the Part B premium, and the insurer may have another premium. This is a bundled plan that offers additional coverage, and this can include benefits for dental, hearing, and vision care.
Medicare Advantage plans do come with an annual limit on your out-of-pocket costs. In 2022, you could have to pay up to $7,550. They also only provide coverage for specific networks or areas, need pre-authorizations and referrals, and charge coinsurance and copays for most health-related services.
Part D – Prescription Drugs
Part D will help cover prescription drug costs. This coverage extends to both brand names and generic drugs. Beneficiaries with higher incomes will pay more.
Medigap – Medicare Supplement Insurance
This is an additional health insurance policy that you can get from a private company to help pay for anything Original Medicare doesn’t pay in relation to doctor visits and general health. In addition, Medigap can help cover coinsurance, some deductibles, and other services. However, if you travel outside of the United States, these plans can’t cover prescription drugs, long-term care, vision, dental, private nursing care, or hearing aids.
There are currently different types of Medigap plans you can choose from in most states. You have to have Original Medicare Part A and Part B to be eligible to buy a Medigap policy. It doesn’t work with Medicare Advantage plans.