Medicare Part A: Hospital Insurance

Part A of Medicare covers inpatient care received in a Hospital or Skilled Nursing Facility (rehab). Part A also includes Hospice and limited Home Health Care. For most people Medicare Part A is free.

Medicare Part B: Medical Insurance

Part B of Medicare covers Doctor office visits and Outpatient Medical Services. These include medically necessary services received at a Doctor’s office, Hospital or Clinic to examine, diagnose and treat your health conditions. Medicare only covers 80% of your Part B medical expenses. Most people pay a monthly premium to Medicare for their Part B coverage. If you are going to be new to Medicare in 2019, the standard Part B premium is $135.50. If you are single and your Modified Adjusted Gross Income for the tax year 2017 was more than $85,000 or $170,000 if you are married and filed a joint tax return you may have to pay a higher Part B premium.

Medicare Part C: Medicare Advantage

Part C of Medicare allows private health insurance companies to provide Medicare benefits. These Medicare health insurance plans are called Medicare Advantage Plans. Insurance companies can offer these plans at a $0 monthly premium or a low monthly premium because The Federal government subsidizes Advantage Plans and insurance companies to control their cost require you to see the doctors and hospitals in their network. If you would prefer to use a doctor or hospital that is not in their system you may have to pay all costs. When traveling, you are out of network and do not have nationwide coverage.

If you are healthy, an Advantage Plan could be a good fit for you but as you get older and need to use more healthcare services the out-of-pocket cost can quickly add up. Between co-pays and coinsurance, you could be out-of-pocket as much as $6,700 in a calendar year for Medicare-approved services. Many people while on an Advantage Plan have developed severe health conditions and wanted to switch back and get a Medicare Supplement during the Annual Election Period in the fall. Unless you qualify for a guaranteed issue due to a particular circumstance, you will have answer the health questions on the Medicare supplement application and could be denied coverage depending on your health conditions. Most people in Alabama only get one open enrollment period to apply for a Medicare Supplement without having to answer health questions. This period is only for six months and begins the first day of the month in which you activate your Part B coverage at age 65 or older.

Medicare Part D: Prescription Drug Coverage

Part D of Medicare provides Outpatient Prescription Drug Coverage. Prescription drug coverage is offered by insurance companies that have contracts with the government to sell this coverage. If you don’t enroll in a Medicare Prescription Drug Plan when you’re first eligible, and you don’t have “creditable” prescription drug coverage, you will have to pay a late enrollment penalty. The late enrollment penalty is permanent and only gets more costly the longer you are without coverage. There are over 25 different Prescription Drug Plans offered in Alabama.

Each Medicare Prescription Drug Plan has its list of covered drugs which is called a “formulary.”  Medicare drug plans place medications that are in their formulary into five different “tiers.” The lower the tier, the less you pay for the medication. Most of the standard generic medicines fall under Tier 1 or Tier 2 while most brand-name drugs fall under Tiers 3, 4 and 5.