September 29, 2020

Everything You Need to Know about Medicare Part A and Part B

If you are turning 65 or about to lose your insurance through your employer’s health plan, it is crucial to understand Part A and Part B of Medicare.

You could also be turning 65 and will continue to work, and you will not lose your employer-based health insurance. No matter your situation, we have created a cheat sheet that you will find very useful. Click on the link to review this page: Start Here.

The industry can make Medicare confusing and hard to understand, but we want to break it down so that you can know how to make the best decisions for your coverage.

What are the Parts of Medicare?

Medicare comprises four parts: Part A, Part B, Part C, and Part D.

Medicare Part A: Is your hospital insurance coverage, skilled nursing care, medical social services, and physical therapy.
Medicare Part B: Is your doctor’s office visits, specialist, outpatient services, lab testing, home health care, ambulance rides
Medicare Part C: is when you leave Original Medicare and obtain your insurance coverage from a private insurance company instead of the government. Part C is referred to as Medicare Advantage.
Medicare Part D: is coverage for prescription drugs. Part D plans are only offered by private insurance companies.

While there are 4 Parts of Medicare, Original Medicare is made up of Part A and Part B. Enrolling in these two parts of Original Medicare is required if you want to obtain a Medigap / Medicare Supplement Plan or enroll in Part C / Medicare Advantage Plan are always going to be the base of your coverage.

While you are not required to enroll into Part B or Part D these two Medicare Part’s do have late enrollment penalties if you don’t enroll when you first become Medicare Eligible for these two benefits.

How do I sign up for Medicare Part A & Part B

Three ways to sign up / apply for Medicare: Part A and Part B.

1) You can easily apply online for Medicare by using this link:
https://www.ssa.gov/benefits/medicare/

2) You can call to Apply:
1-800-772-1213 or;

3) You can Apply in Person
(if your Social Security office is open.) Here is a directory of the Social Security offices:
https://secure.ssa.gov/ICON/main.jsp

Because of COVID-19, most people find that there are only two options to sign up as their local Social Security Office does not allow in-person visits. Please check with your local Social Security office to see if they are open if this is your preferred method of signing up for Medicare.

What is Medicare Part A?

As mentioned above, Part A is going to be your hospital insurance. It will also cover skilled nursing services.

Many people wonder how much it costs to go to the Hospital under Original Medicare. Following is a breakdown of the cost if you go to the Hospital.

You pay (Plan year 2020):

$1,408 deductible for each benefit period
Days 1-60: $0 coinsurance for each benefit period
Days 61-90: $352 coinsurance per day of each benefit period
Days 91 and beyond $704 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
Beyond lifetime reserve days: all costs

Please remember that these costs assume you only signed up for original Medicare. Most Medicare Beneficiaries will also purchase a separate Medigap plan, as many of these plans will cover 100% of this cost.

Once you reach age 65 and enroll in Medicare Part A, most Medicare beneficiaries will not have to pay an insurance premium for their Part A coverage. This is because you have paid for this coverage through your payroll taxes as long as You or your spouse paid into your Medicare taxes for 40 quarters / 10 years. If you are unsure if you have met this requirement, we encourage you to check your status at Medicare.gov.

If you are already taking Social Security benefits, you will automatically be enrolled in Part A and B when you turn 65. You can sign up for Medicare through Social Security if you are not taking Social Security.

Sign up for Medicare Part A if you do not have another form of health insurance when turning 65. We recommend clients who keep working past 65 still sign up for Medicare Part A even if they stay on their work insurance. It is free and might provide you with some extra protection if you should have to go to a hospital.

What is Medicare Part B?

Medicare Part B covers your doctor and outpatient services.

Part B has a monthly premium of $144.60 in 2020. Most people are going to pay this out of their Social Security check. You could pay more for your Part B if you make a higher income.

Part B also has a yearly deductible of $198 in 2020. Once you pay the deductible, Medicare Part B covers 80% of all your bills. You must pay the remaining 20% coinsurance related to your Part B Medicare coverage. It is essential to not confuse your Part B deductible with the Part A deductible.

We are finding that most medical needs now fall under your Part B coverage. Prior, most hospitals would have dealt with many of the procedures needed, which would have fallen under your Part A benefit. However, even if you are treated at a hospital, they do not classify many procedures as outpatient services, which falls under your Part B benefits. This means you will have a 20% coinsurance obligation/bill for which you will be responsible. There is no cap or max out-of-pocket limit for the coinsurance amount.

To break that down, if you get a $1,000 Medicare Part B charge, you have to pay $200. If you get a $10,000 Medicare Part B charge, you have to pay $2,000. If you get a $100,000 Medicare Part B charge, you must pay $20,000. While 20% doesn’t seem like much on small bills, it can and will add up quickly.

This example assumes all your providers accept Original Medicare assignments. While most providers do, if they don’t, you would also be responsible for any excess charges that can equal 15% of the bill, which could make the out-of-pocket costs even higher.

As Medicare Part B can be delayed if you have creditable coverage through an employer plan, we recommend that you do not sign up for Medicare Part B until you no longer have coverage from your work or a spouse’s work. You must obtain a letter from your or your spouse’s employer stating when your coverage will end.

You must also sign up for Part B coverage within the timeframe required to avoid paying any late penalties. Please review the enrollment periods page for a more complete understanding of all the time periods to enroll.

If you already take Social Security benefits, you must opt out of Medicare Part B. If you are not taking Social Security benefits and don’t want Part B, you do not have to do anything.

Should I get a Medicare Supplement with Original Medicare?

A Medicare Supplement insurance policy is a great way to contain your costs related to Original Medicare. As you have read, Part A and Part B have costs that could cause a costly bill if and when you go to the hospital or doctor’s office.

A private insurance company sells a Medigap policy, but the US Government designs and approves the coverages. This means that the coverages are standardized across all insurance carriers. The plan must be the same if you purchase a Plan G from carriers A, B, or C. The only thing that can be different is the premium each carrier charges for that specific plan.

Another great advantage of staying with Original Medicare and purchasing a Medigap plan is that this allows your Doctor to decide what is “Medically Necessary” and not turn that decision/control over to the insurance company or a medical group if you sign over your Medicare rights over to a Medicare Advantage Plan that is precisely what you are doing.

The biggest reason Medicare Beneficiaries obtain a Medigap plan is to fill in the gaps left behind by Original Medicare. In addition, when you stay with Original Medicare with a Medigap plan, you can keep your ability to see any Doctor or medical facility that accepts Medicare. You are not tied to a specific limited group of Doctors or medical facilities.

If you have a Medicare Supplement, not only is it going to pay this 20% coinsurance, if you choose the right plan, it will also cover the Part A deductible as well as the excess charges that you would be responsible for.

The Medicare Supplement we recommend for almost all our clients is Plan G. Plan G typically provides the greatest coverage for the best value.

You want to work with an independent Medicare Insurance Agent who sells for multiple Medicare Insurance Carriers to ensure you get the best rate for your Medicare Supplement.

Integrity Now Insurance Brokers represents all of the significant Medicare Insurance Carriers that are available in the marketplace today. We would love to hear from you so we can review your Medicare needs and find a plan that meets them.

Integrity Now Insurance Brokers, Inc.

(562) 735-3553