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MEDICARE 101

WHAT IS MEDICARE INSURANCE?

Medicare is a federal health insurance program created for individuals age 65 and older, as well as certain younger people with medical conditions or disabilities. This program is divided into various parts, and it’s important to learn how these fit together.

MEDICARE PART A

PART A is hospital insurance that assists you with the cost of inpatient care and skilled nursing facility stays. It also helps with things like hospice and home health care. In general, you should think of the inpatient hospital benefit as Medicare coverage for room and board in the hospital.

It covers the cost of your semi-private room. However, Part A does NOT cover all of the treatments that might occur in a hospital or clinical setting, such as outpatient surgeries. Those could fall under Part B.

The cost of Part A for most people at age 65 is $0. This is because during your working years you have paid taxes to pre-fund the premiums for your hospital benefits. You can also get Part A for $0 through a spouse or ex-spouse’s work history. Even if you don’t automatically qualify for premium-free coverage, most people age 65 can still get it – they would just pay a hefty premium for it.

MEDICARE PART B

PART B is your outpatient medical coverage. Part B covers essentially all of your other medical services outside of your inpatient hospital care. Without Part B, you would be uninsured for doctor’s visits (including doctors who treat you in the hospital). You would also not have Medicare coverage for lab work, preventive services, ambulance services and outpatient surgeries.

More importantly, Part B covers cancer therapy and kidney dialysis. These are extremely expensive items that would cost a fortune without Part B an supplemental coverage.

The cost of Part B is set by Social Security and it changes from year to year. Individuals in higher income brackets pay more than those in lower incomes brackets. Your modified adjusted gross income reported to the IRS determines what your Part B premium will be. 

MEDICARE PART C

PART C refers to the MEDICARE ADVANTAGE PROGRAM, or private insurance. The cost of Advantage plans varies by carrier, county of residence, and plan selected.

To enroll, you must first be enrolled in both Parts A and B. Even if you find a Part C plan with a very low premium, you will still pay for Part B. You must also live in the plan service area and apply during a valid election period.

Once you enroll, your Medicare coverage will come from the Advantage plan itself, not from the government.

The reason you don’t enroll in Part C at Social Security is that Part C is voluntary. Many people prefer to get their Medicare coverage from Original Medicare and traditional Medigap plans. These people do not want Advantage plan, so they will simply not enroll in one.

MEDICARE PART D

PART D is the newest part of our national health insurance program for people age 65 & up. For half a century, there was no Medicare coverage for prescription medicines. In 2006, our federal government rolled out Part D and tens of millions of Medicare beneficiaries signed up to get coverage for their outpatient drugs.

It covers retail prescription drugs that you pick up yourself at the pharmacy or order via mail order. You choose a carrier and enroll in their drug plan, and that’s how you sign up for a Part D drug plan. Most states have about 30 drug plans to choose from. However, the best way to determine which one is the right fit for you is to have your agent run a Part D analysis using Medicare’s prescription drug finder tool.

Before choosing a plan, we want to be sure you know the difference between your options. In particular, how Medicare Supplements and Medicare Advantage Plans differ. Many people sign up for Advantage Plans thinking they are Supplements unfortunately, they are not.

MEDICARE ADVANTAGE PLAN

A Medicare Advantage Plan is a type of Medicare health plan offered by a private company that contracts with Medicare to provide you with all your Part A and Part B benefits. 

Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans, and Medicare Medical Savings Account Plans. 

If you're enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan and aren't paid for under Original Medicare. Most Medicare Advantage Plans also offer prescription drug coverage.

What do Medicare Advantage Plans cover?

Medicare Advantage Plans must cover all of the services that Original Medicare covers except hospice care. Original Medicare covers hospice care even if you're in a Medicare Advantage Plan. In all types of Medicare Advantage Plans, you're always covered for emergency and urgently needed care.

Medicare Advantage Plans may offer extra coverage, like vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D). In addition to your Part B premium, you usually pay a monthly premium for the Medicare Advantage Plan.

You can also ask the plan for a written advance coverage decision to make sure a service is medically necessary and will be covered. If the plan won't pay for a service you think you need, you'll have to pay all of the costs if you didn't ask for an advance coverage decision. 

MEDICARE SUPPLEMENT PLAN

Medicare supplement (Medigap) insurance can help pay some of the health care costs that original Medicare does not cover, like copayments, coinsurance, and deductibles.

Some Medigap policies also offer coverage for services that Original Medicare doesn't cover, like medical care when you travel outside the U.S. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs. Then your Medicare supplement insurance policy pays its share.

A Medigap policy is different from a Medicare Advantage Plan. Those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Original Medicare benefits.

Things to Know About Medicare Supplement:

: If you have a Medicare Advantage Plan, you can apply for a Medigap policy, but make sure you can leave the Medicare Advantage Plan before your Medigap policy begins.

: You pay the private insurance carrier a monthly premium for your Medigap policy in addition to the monthly Part B premium that you pay to Medicare.

: A Medigap policy covers one person. If you and your spouse both want Medigap coverage, we'll work with you to setup two separate policies.

: Any standardized Medigap policy is guaranteed renewable even if you have health problems. This means the insurance company can't cancel your Medigap policy as long as you pay the premium.

This is a solicitation for insurance. Submitting your information and/or calling the numbers listed on this website will direct you to a licensed Agent/Broker. Important disclosures: Medicare has neither endorsed nor reviewed this information. Not connected or affiliated with any United States Government or State agency. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. If you would like to find more information about the program, please visit the Official U.S. Government website for Medicare, [www.medicare.gov]or call 1-800-MEDICARE, thats (1-800-633-4227) TTY users can call: 1-877-486-2048, you can talk/chat live with a real person, 24 hours a day, 7 days a week (except some federal holidays); or you can contact your local State Health Insurance Assistance Program (SHIP) to get information on all of your options.