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What is Medicare?

Medicare is health insurance for people 65 or older, people under 65 with certain disabilities, and people of any age with End-Stage Renal Disease. It ensures that all seniors have basic hospital insurance (Part A) at no cost to them. It also provides the option of medical insurance (Part B). Part A & Part B make up what is called Original Medicare. Part A comes at no cost to the senior. Part B does involve a monthly premium that’s generally automatically taken out of Social Security.

 

How You Qualify

Medicare eligibility begins for most people at age 65. Individuals who have been entitled to Social Security disability for at least 24 months also qualify.
Many people confuse their Medicare Eligibility date with their Social Security date. They are different. A person can apply for full retirement income benefits at age 66. However, this does not affect the age at which they qualify for Medicare. Everyone who has worked at least 40 quarters (10 years) in the United States during their lifetime can qualify for Medicare at age 65.
If you are already receiving Social Security or Railroad Retirement Benefits, then you will also automatically receive Part A and Part B starting the first day of the month you turn 65. If you're automatically enrolled, you will receive your Medicare card in the mail 3 months before your 65th birthday, or the 25th month of disability benefits.
If you are not receiving Social Security or Retirement Benefits, or if you have End-Stage Renal Disease, you will need to sign up for Part A. There are many ways to do so, whether in person, over the phone, or online. To learn more, please visit this page. If you are not automatically enrolled, and are eligible to sign up for Part A, you can enroll anytime once your Initial Enrollment Period starts. You can only sign up for Part B during your initial enrollment period, general enrollment period, or special enrollment period. These enrollment periods are discussed in further detail on our "Medicare Enrollment Periods" page.

 

Parts of Medicare

There are 4 parts of Medicare. These include Part A, B, C, and D. These are explained more in depth under Parts of Medicare.

medicare-a-b-c-d-basics

 

Original Medicare

Original Medicare, also known as Part A and Part B, is managed by the federal government and provides Medicare eligible individuals with coverage for and access to doctors, hospitals, or other health care providers who accept Medicare. Part A includes hospital coverage, as well as some short term post-hospital care. Part A does not cover long-term care. Part B is your medical insurance, including doctors visits, laboratory testing, and some preventative care. Part A and Part B do not include certain services, such as dental services. In addition, they do not cover Prescription drug plans. If you are on Original Medicare, you will need to sign up for a Part D plan in order to receive prescription drug coverage.

Original Medicare is a fee-for-service plan, meaning that the person with Medicare usually pays a fee for each service. Medicare pays its share of an approved amount up to certain limits, and the person with Medicare pays the rest.

How much does Part A cost?

Most beneficiaries will pay nothing for Medicare Part A. We all pay taxes during our working years that are specifically for our future healthcare coverage during retirement. These taxes go to offset the cost of Part A later on. As long as you have worked for 10 years (40 quarters) in your lifetime in the United States, you will generally pay nothing at all for Part A. If you or your spouse have not worked 10 years in the U.S., the monthly premium for part A is up to $422/month in 2018. People with less than 40 quarters work experience but more than 30 quarters can get a pro-rated premium.

How much does Part B cost?

The majority of Americans will pay the standard monthly amount set by the government. In 2018, this is $134.00/month for most people (or higher depending on your income). However, some people who get Social Security benefits pay less than this amount ($130 on average).

If you enroll late into Part B, you may also have to pay a penalty for life. It’s important not to miss your enrollment window whenever you retire and lose access to your employer group health insurance.

You will pay a percentage of the costs of your medically-necessary Part B services. Generally, these costs are:

  • the annual Medicare Part B deductible (in 2018, this is $183)
  • 20% of the remaining costs, with no limits or cap
  • any excess charges that a provider or facility may charge beyond what Medicare reimburses

 

The Need for Medicare Supplements or Advantage Coverage

The above Medicare structure covers the basics for some seniors, but leaves many with high out-of-pocket costs. Private insurance companies offer Medicare Advantage Plans and supplemental plans to alleviate the financial burdens imposed by relying solely on Part A & Part B for senior health care coverage.

These private plans charge a monthly premium and can offer coverage that protects financial assets in the event medical services needed are not covered by Original Medicare coverage. We work with many seniors and their families to understand Medicare options and provide cost breakdowns and comparisons so that they can make an informed and wise choice about Medicare plans and supplements when open enrollment hits.

 

Alternatives to Original Medicare

As mentioned previously, the costs of Part A and B can be high, and they provide limited coverage. In addition, there is no out-of-pocket maximum for Original Medicare. This is the most you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance, your health plan pays 100% of the costs of covered benefits. Because their is no out-of-pocket maximum, there is no limit to what you will spend out of pocket for your health coverage. Furthermore, no Prescription Drug Plan is included in Parts A and B of Medicare.

There are two main ways in which you can protect yourself against catastrophic medical spending. Medicare supplements are available for purchase to cover the parts that A & B don’t. If you need a more affordable option, Medicare Advantage plans are a great option to get your A & B benefits through a private health insurance plan at very little cost. Medicare Advantage Plans often include drug coverage as well.

 

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4101 Perimeter Center Dr

Oklahoma City, OK 73112

405-792-4400 OKC

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