Medicare is a federal government program that provides health insurance for people age 65 and older, people under age 65 who are disabled, people with amyotrophic lateral sclerosis (ALS), and people with permanent kidney failure requiring dialysis or a kidney transplant. The Medicare program is made up of several “parts” that offer various benefits, including hospital insurance (Part A), medical insurance for outpatient and physician services (Part B), and prescription drug coverage (Part D).
Enrollees also have the option to buy Medicare Advantage Plans (Part C), which wrap Part A and Part B—and usually Part D—into one plan.
Medicare provides health coverage for nearly 62 million Americans.1 But the details of the coverage, eligibility, and plan changes can be confusing. The following 20 questions are among the most commonly asked:
If you are under 65 you are eligible to receive Part A benefits under the following circumstances:
- You have been receiving Social Security Disability Insurance for more than 24 months.
- You have permanent kidney failure (end-stage renal disease requiring ongoing dialysis or a kidney transplant).
- You have been diagnosed with amyotrophic lateral sclerosis (Lou Gehrig’s disease).
Medicare Part A, also known as the Hospital Insurance program, helps cover the costs of care in the following facilities:
- Inpatient care in hospitals
- Inpatient care in a skilled nursing facility (assuming you had a least a three-day inpatient stay in the hospital prior to the skilled nursing facility stay)
- Inpatient rehabilitation facility
- Hospice care services
- Some home health care services
- Inpatient mental health and psychiatric care
If you are eligible for Medicare you will not have to pay a monthly premium for Part A if you or your spouse paid Medicare payroll taxes while working for at least 10 years.
If you or your spouse did not work or did not pay enough Medicare payroll taxes you may not be eligible for premium-free Part A. However, you may be able to purchase Part A by paying a monthly premium, which is either $458/month or $252/month in 2020, depending on how many years you paid into Medicare payroll taxes.2
You should contact your local Social Security office three months before your 65th birthday to sign up.
Medicare Part B is also known as the Medical Insurance program. In general, Part B covers two types of services:
- Medical services: Healthcare that you may need to diagnose and treat a medical condition. Medicare will only pay for services that they define as being medically necessary.
- Preventive services: Healthcare to prevent illness (such as a flu shot) or help detect an illness in an early stage so it can be managed before getting worse (such as screening for colon cancer).
- Under Part B, Medicare helps pay for durable medical equipment such as oxygen equipment, wheelchairs, walkers, and other medically necessary equipment that your doctor prescribes to use in your home.
Medicare drug plans have a coverage gap, also known as the “donut hole.” The donut hole begins after you and your drug plan have spent a certain amount of money for covered medications, and continues until another spending threshold is reached.
Before the Affordable Care Act (ACA) was implemented, Medicare beneficiaries had to pay the full cost of their medications while they were in the donut hole. But the ACA started closing the gap in 2011. And it is fully closed as of 2020—endrollees in standard drug plans pay 25% of the cost of their medications both before and during the donut hole (after meeting their deductible, which is a maximum of $435 in 2020).3
But the donut hole still exists in terms of how drug spending is counted before and during the donut hole. To determine when you enter the donut hole, the total amount that you and your drug plan pay for your medications is combined until it reaches the initial donut hole threshold ($4,020 in 2020). But then you have to reach another spending level before you exit the donut hole and enter the catastrophic coverage level (where your drug costs will be greatly reduced, but still not fully covered). That amount is based on what you pay plus the manufacturer discount, which covers the majority of the cost of your medications while in the donut hole.4
Original Medicare (Part A and/or Part B) pays for the majority of beneficiaries’ health-related services and medical supplies. But as is the case with most insurance plans, there are out-of-pocket costs. And unlike other types of health insurance, there is no cap on how high your out-of-pocket costs can be with Original Medicare.
You can purchase an insurance policy to cover the “gaps” that are not paid for by Medicare, such as copayments, coinsurance, deductibles, and excess charges. Without a Medigap policy, these can amount to substantial out-of-pocket expenses.
Some Medigap policies also will pay for certain health services outside the United States, which is generally not covered under Original Medicare at all. Medigap insurance (also known as Medicare Supplement Insurance) is voluntary and you are responsible for the monthly or quarterly premium. Medicare will not pay any of your costs to purchase a Medigap policy.
Medigap plans are offered by private health insurance companies. The prices vary from one insurer to another, but the plans themselves are standardized. The Medicare website has a page where you can learn about the standardized plan designs, a guide to choosing a Medigap policy, and a tool that you can use to find and compare Medigap plans in your area.
The federal government sets minimum standards in terms of the rules that apply to Medigap plans. But states have varying additional rules and regulations. You can click on a state on this map to see how Medigap plans are regulated in the state.
Medicare Part C, also known as the Medicare Advantage program, allows you to choose a health plan offered by a private insurance company that is approved by Medicare. Most Medicare Advantage plans are managed care organizations (such as a PPO or HMO), but there are also private fee-for-service plans available in some areas that don’t have provider network requirements.
Medicare Advantage plans receive payments from Medicare to provide you with the benefits covered by Original Medicare, including Part A and Part B. Most Medicare Advantage plans include Part D drug coverage and many offer extra coverage, such as vision and hearing care, dental services, gym memberships, and wellness programs.
More than a third of Medicare beneficiaries receive their coverage through a Medicare Advantage plan.6
Although there are a few areas of the country where Medicare Advantage plans are not available, the average Medicare beneficiary can choose from among 28 Advantage plans in 2020.7
The Affordable Care Act made several changes to Medicare that have improved benefits and access to preventive care for millions of enrollees. There are also changes that improve the long-term financial health of the Medicare program. Some significant changes that directly affect Medicare beneficiaries include:
- Coverage Gap Savings: If you reached the coverage gap (the donut hole) in 2010 you received a one-time rebate check of $250 from Medicare. Starting in 2011, enrollees who reached the coverage gap began receiving a discount on their medications while in the coverage gap. The discounts have increased each year, and the coverage gap is completely eliminated as of 2020 (as described in question 5, above, the donut hole is still pertinent in terms of how drug spending is calculated in terms of reaching the catastrophic coverage level).
- Preventive Care: Beginning in 2011, Medicare now pays for an annual checkup, including a physical examination and a total elimination of cost-sharing for various recommended preventive services and screenings.8
You have two main choices for how you get your Medicare—Original Medicare or a Medicare Advantage Plan. If you choose Original Medicare (which includes Part A Hospital Insurance and Part B Medical Insurance), you will also have the option to enroll in a Part D Prescription Plan. You will also need to decide if you want to purchase Medicare Supplement Insurance (Medigap) to pay for the out-of-pocket costs that go along with Parts A and B.
If you choose a Medicare Advantage plan, it will combine the benefits of Medicare Part A and Part B into one private plan that will also likely include Part D prescription drug coverage (90% of Medicare Advantage plans include Part D prescription coverage in 20209). Enrollees must pay the premium for Part B in addition to the premium for their Advantage plan, although some Advantage plans—about half of the plans available for 2020—have no premium, so enrollees only pay the Part B premium.
If you have a Medicare Advantage Plan, you do not need Medigap coverage. But it’s important to understand that there is not an annual window for enrolling in Medigap plans. If you enroll in a Medicare Advantage plan and then decide several years later that you’d rather have Original Medicare, you’ll likely have to go through medical underwriting in order to get a Medigap plan (the rules vary by state), which means that your price and/or eligibility for coverage will depend on your medical history. And keep in mind that without a Medigap supplement (or supplemental coverage from an employer-sponsored plan or Medicaid), your out-of-pocket exposure with just Original Medicare is unlimited.
Medicare will only pay for services that are considered to be medically necessary. According to Medicare, services or supplies are considered medically necessary if they:10
- Are proper and needed for diagnosis, or treatment of your medical condition.
- Are provided for the diagnosis, direct care, and treatment of your medical condition.
- Meet the standards of good medical practice in the medical community of your local area.
- Are not mainly for the convenience of you or your doctor.
Medicare pays for certain healthcare services to prevent illness (such as a flu shot) or help detect an illness in an early stage so it can be managed before getting worse (such as screening for colon cancer). Your doctor can tell you what tests you need and how often you need them.
As a result of the ACA, Medicare enrollees get a free annual wellness visit, along with a variety of free preventive care.8
Medicare Part B covers some diabetes supplies,11 including:
- blood glucose test strips
- blood glucose monitor
- lancet devices and lancets, and
- glucose control solutions for checking the accuracy of test strips and monitors.
Medicare may limit how much or how often you get these supplies. Regular Medicare (ie, Part B) does not cover insulin unless you use an insulin pump.12 You will have to pay 100% for insulin (unless used in an insulin pump), syringes, and needles, unless you have enrolled in a Medicare Part D prescription drug plan or have a Medicare Advantage plan with integrated Part D drug coverage.
Medicare does not cover routine dental care or most dental procedures such as cleanings, fillings, tooth extractions or dentures. Medicare Part A may pay for some dental services that you get while you’re hospitalized, including emergency dental surgery performed in an inpatient setting. Most Medicare Advantage plans include at least basic dental benefits—88% do so in 2020.13
But the specific dental benefits provided will vary by plan, since this is an extra benefit offered by the Medicare Advantage insurer, and not part of the Medicare program itself. So if you’re considering Medicare Advantage plans that include dental benefits, you’ll want to read the fine print to see what specific services and benefits are included in the coverage.
Medicare covers services for the diagnosis and treatment of eye disease both in your doctor’s office and the hospital. This includes testing and treatment for conditions such as macular degeneration, glaucoma, and cataracts.
If you have diabetes, Medicare Part B covers the cost of an annual diabetic retinopathy screening.14
Medicare does not cover the cost of routine vision tests or the cost of eyeglasses or contact lenses. However, following cataract surgery with an intraocular lens, Medicare will help pay for cataract glasses, contact lenses, or intraocular lenses provided by an ophthalmologist.
If you have Original Medicare (Part A and Part B), call Medicare at 1-800-633-4227, or visit www.socialsecurity.gov/medicarecard. When you request a replacement Medicare card online or on the phone, you will need:
- Your name as it appears on your most recent Social Security card
- Your Social Security Number
- Your date of birth
You should receive your replacement Medicare card in the mail in about 30 days. You can also visit your local Social Security office.
The government sent new Medicare cards to all beneficiaries, starting in April 2018. The new cards use a unique identification number instead of Social Security numbers.15
If you are enrolled in a Medicare Advantage Plan and lost your card, call your plan’s customer service number for a replacement.
According to Medicare, if you need a drug that is not on your Part D plan’s formulary (covered drug list), or that is on the list but you think it should be covered for a lower copayment, you can do the following:
- Contact the plan and ask for an exception. You will probably have to provide information from your doctor about why you need the drug your plan won’t cover.
- If your plan denies the exception, you can appeal. Your Part D plan must give you information on how to appeal.
Keep in mind that you have an opportunity to switch to a different Part D plan each year during the annual open enrollment period (October 15 to December 7). During that window, you can use Medicare’s plan finder tool to compare each of the Part D plans available in your area, and see how much your specific drugs would cost under each plan.
Drugs on a Part D formulary are usually grouped into tiers, and your copayment or coinsurance is determined by the tier that your medication is on. A typical Part D drug formulary includes three to five tiers.
Tier 1 has the lowest co-payment and usually includes generic medications.
Tier 2 has a higher co-payment than tier 1 and usually includes preferred brand name medications.
Depending on how the plan is designed, more expensive drugs are classified into Tier 3, Tier 4, and/or Tier 5. Drugs in these higher tiers have higher out-of-pocket costs, and can include non-preferred brand name medications as well as specialty drugs. Drugs in the highest tiers are more likely to have coinsurance (a percentage of the cost) rather than a copay (a flat out-of-pocket amount). Your plan may place a medication in a higher tier because there is a similar drug on a lower tier of the formulary that may provide you with the same benefit at a lower cost.
With very limited exceptions, Original Medicare (Parts A and B) generally doesn’t cover health care while you are traveling outside the U.S. and its territories.16 Some Medigap policies provide Foreign Travel Emergency health care coverage when you travel outside the U.S.17
Some Medicare Advantage plans may provide worldwide coverage benefits for health care needs when you travel outside the United States. Before traveling outside the country, check with your Medicare Advantage plan regarding travel benefits.
If you know that you will not have Medicare-related coverage when you travel, you may want to consider purchasing a temporary travel health insurance policy.
You have several options if you need help with medical and drug costs, such as premiums, deductibles, and other out-of-pocket expenses. These options include:
- Medicare Savings Program
- Extra Help and Low-Income Subsidy
- State Pharmaceutical Assistance Program
- Pharmaceutical Assistance Program
You can contact your State Health Insurance Assistance Program for help in determining whether you qualify for any programs that could help you afford your coverage and out-of-pocket costs.
Do you have questions about Medicare? Are you having a problem with Medicare coverage or a Medicare claim? Not sure where to turn?
You also can get some of your Medicare questions answered directly from the “horse’s mouth” at the Medicare Support Center, by calling 1-800-MEDICARE.
Medicare Questions and Problems: Where to Get Help will show you the six best resources for answering your Medicare questions and resolving your Medicare problems.
You can also contact us at Basi Insurance Service, Inc.! We have account managers & agents who are experts in health insurance. Email: [email protected] or call us M-F 8am-5pm.
Article courtesy of verywellhealth.com