Medicare is the federal health insurance program for people who are 65 or older, and some people under the age of 65 who are disabled or suffer from End-Stage Renal Disease (sometimes referred to as ESRD). Typically, beneficiaries pay for some of the costs for each service provided including premiums, copayments and coinsurance. Beneficiaries are not required to choose a primary care doctor, nor are they required to obtain a referral to see a specialist. Covered individuals can choose the doctor, other health care providers, hospital or other facility, provided the physician or other health care provider/ facility accepts Medicare.
Medicare is comprised of four parts that each cover different services:
- Medicare Part A (Hospital Insurance) covers inpatient hospital stays, care received in a skilled nursing facility (SNF), hospice care and some home healthcare services. Most people do not pay a premium for Part A coverage, as long as they or their spouse paid Medicare taxes while working.
- Medicare Part B (Medical Insurance) helps pay for services from doctors and other healthcare providers, home healthcare, medical equipment, and some prescription drugs (such as clotting factor). The monthly premium for Part B is $134.00. (Note: some people may pay an additional charge depending on their modified gross income) The deductible for Medicare Part B is $166.00. Part B covers 20% of the services offered. You will need to purchase Part C (Medigap) or a Medicare Advantage plan from a private insurer for the remaining 10% that is not covered.
- Medicare Part C (Medicare Advantage Plans) is a type of health plan that is offered by a private insurer that works with (or in conjunction with) Medicare to provide you full Medicare coverage. These plans may include health maintenance organizations (HMO), preferred provider organizations (PPO), private fee for service plans, special needs plans and Medicare Medical Savings Account Plans. Medicare services provided to someone on a Medicare Advantage Plan are covered through the plan and are not paid for under the original Medicare. Most Advantage Plans also offer prescription drug coverage. If you are retiring, consider asking your current insurance provider what options are available to you upon retirement. Your current insurer can provide some guidance as to what Medicare Part C plan is best for you.
- If you have Medicare Part A or Part B you are eligible for Part D (Medicare prescription drug coverage). Part D benefits are available as a stand-alone plan or built into Medicare Advantage. The drug benefits work the same in either plan. Joining a Medicare prescription drug plan is voluntary, and you pay an extra monthly premium for the coverage. Some beneficiaries with higher incomes will pay a higher monthly Part D premium. Please note that if you do not purchase a part D prescription plan you will be responsible for the cost of your prescription drugs. If you are still employed and considering retiring check with your current prescription drug provider to see what options are available to you.
Most Medicare prescription drug plans have a coverage gap (often referred to as the donut hole) but not everyone reaches the gap. For those who reach the gap, some drugs such as generics, may be covered. However, for those with rare, chronic conditions requiring the use of specialty drugs or multiple therapies, it is important to be aware of when this gap begins and ends. Once you and your plan have collectively spent $2,850, you enter the coverage gap. Once you reach the gap the cost share methodology changes, until you are out of the coverage gap. Learn more about copayment/coinsurance responsibilities in drug plans.
Once you have spent $4,450 out of pocket you are considered to be “out” of the coverage gap and you automatically receive “catastrophic coverage” which assures you only pay a small coinsurance or copayment for covered drugs for the rest of the year.
Clotting factor is NOT covered under Medicare Part D, but is covered under Medicare Part B.
Get the complete list of 2014 Medicare costs, including premiums, deductibles, copayments, and coinsurance. You can also find information on other penalties and policies associated with each part.
The information on this page is provided for informational purposes only and is not intended to provide advice about your eligibility for any program or any particular insurance product for you or your family. If you have questions about whether you qualify Medicare, please contact the Centers for Medicare & Medicaid Service or the U.S. Social Security Administration.