Part A of Medicare covers inpatient care in a hospital or skilled nursing facility. Part A also covers hospice care and limited home health care. If you have paid Social Security taxes for at least 40 quarters (10 years), this coverage is free.
Medicare Part B: Medical Insurance
Part B of Medicare covers doctor office visits and outpatient medical care. This includes medically necessary services received at a doctor’s office, hospital or clinic to examine, diagnose and treat your health conditions. Most people pay a monthly premium to Medicare for their Part B coverage. If you are going to be new to Medicare in 2018, the standard Part B premium is $134.
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 they control their cost by requiring you to use the doctors and hospitals that are in their network. If you would prefer to use a doctor that is not in their network the charges may not be covered at all. When traveling, you do not have nationwide coverage with an Advantage Plan.
If you are healthy, the 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 all health questions on the application and could be denied coverage depending on your health conditions. Most people only get one open enrollment period to apply for a Medicare Supplement without having to answer health questions. This period lasts 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 not offered by Medicare but only through insurance companies that have contracts with the government to sell this coverage. If you don’t join 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 for 2018 is 35 cents for every month you were not covered. It’s a permanent penalty that never goes away and only gets bigger the longer you are without coverage.
Each Medicare Prescription Drug Plan has its list of covered drugs which is called a “formulary.” Medicare drug plans place drugs that are in their formulary into five different “tiers.” The lower the tier, the less you pay for the medication. Most of the common generic medicines fall under Tier 1 or Tier 2 while most brand-name drugs fall under Tiers 3 and 4.