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 health care 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) covers certain doctors’ services, outpatient care, medical supplies, preventive services and some prescription drugs (such as clotting factor). The monthly premium for Part B is $104.90 (Note: some people may pay an additional charge depending on their modified gross income) and the deductible is $147. Per the Centers for Medicare & Medicaid Services (CMS), in 2014 there may be limits on physical therapy, occupational therapy, and speech language pathology services. If so, there may be exceptions to these limits.
- Medicare Part C (Medicare Advantage Plans) is a type of health plan that is offered by a private company that contracts with Medicare to provide you will all of your Part A and B benefits. 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.
- Medicare Part D (Prescription Drug Coverage) plans are offered by insurance companies and other private companies approved by CMS and are designed to add prescription drug coverage to original Medicare, Medicare cost plans, some Medicare private-fee-for-service plans and Medicare medical savings account plans. As indicated above, Medicare Advantage Plans may also offer prescription drug coverage and follow the same rules as the Medicare Prescription Drug Plans. The premium costs for Part D plans varies, however no Medicare drug plan may have a deductible greater than $310 in 2014. Like group and individual plans, your cost share for prescriptions depends on the category or “tier” the drug is assigned. For example, tier 1 (or generic) drugs often come with minimal copay, like $10. However, tier IV or specialty drugs, may require the beneficiary to pay a percentage of the drug’s actual cost, typically between 20%-33%.
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.