Medicare ABCs

It is estimated by the Centers for Medicaid & Medicare Services that about 57,000,000 are enrolled in Medicare Part A or B.  With the growing number of Baby Boomers reaching retirement age, that number is sure to rise.  So what does Medicare cover, when should you enroll and what does it cost?  The following is a short review:

Part A

Covers: Hospital care, a limited amount of skilled nursing facility care, hospice and home health services.  Don’t confuse skilled nursing with long-term care.  Skilled nursing is covered only after a qualifying hospital stay and Medicare only pays for the first twenty days of skilled nursing care.  After that, the patient becomes responsible for part of all of the cost depending on the length of stay. Part A does not cover long-term care, dental care, vision care and hearing aids.

When to Enroll: Unless you are already receiving social security benefits four moths before turning 65, you will need to enroll in Medicare. You can sign up for Medicare three months before the month of your birthday and three months after.  If you are still working and covered by a employer health plan,  you have eight months to enroll after your coverage ends.  COBRA doesn’t count as coverage.

What does it cost: If you have paid Medicare taxes during your lifetime there should not be a monthly premium.  In some cases premiums can be as much as $413 in 2017.  There is a deductible. The deductible is $1,316 for each inpatient stay at a hospital or skilled nursing facility. It’s possible to have multiple deductible payments in one year.

Part B

Covers: Medically necessary services, preventive services, ambulance service, medically necessary equipment, mental health care, some second opinions.

When to Enroll:  If you are automatically enrolled in Part B and are still covered by a group plan you can drop Part B coverage.  Again, you have eight months after your employer coverage ends to enroll in Part B without penalty.

What does it cost:  Premiums will vary by income and are typically deducted from Social Security benefits.  Premiums range from $134 to $428.60 in 2017.  The Part B deductible is $183 plus $20 of costs after that.

Part D: Prescription drugs.

Covers: You should enroll in Part D as soon as you are eligible for Medicare.  If you already have drug coverage, you can delay enrollment until that coverage ends.  If you do not enroll when you are first eligible there are penalties for late enrollment.

What does it cost: Premiums vary by plan.  Deductibles are up to $400.  There is a gap in coverage called the “donut hole”.  Once costs reach $3,700 during the year, you are responsible for the cost of drugs until your out of pocket expenses reach $4,950.  After that, the insurance pick back up.

If you would like to know more, please give me a call.