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Medicare Coverage Options

Medicare Coverage Options

Original Medicare:

To better understand the plan benefits, let's take a very simplified look at Medicare coverage in general. The Medicare program began in 1966 offering Part A "hospital" benefits and Part B "medical" benefits to anyone age 65 or older or disabled for 2 years at any age.

Part A (See "Medicare and You" - pages 24, 27-31)

  • Is generally premium free, based on the recipient's work history.
  • Under Part A, if you are hospitalized as an inpatient, you are responsible for the Medicare Part A deductible of $1,216 per stay (2014). After the initial deductible is covered by the patient, Medicare generally will pay 100% of your approved hospital room and board charges for the next 60 days. This would include special dietary meals required due to your condition.
  • Note: Staying overnight in a hospital doesn't always mean you're an inpatient. You're considered an inpatient the day a doctor formally admits you to a hospital with a doctor's order. Being an inpatient or an outpatient affects your out-of-pocket costs. Always ask if you're an inpatient or an outpatient.

Part B (See "Medicare & You" - pages 25, 32-50)

  • For 2013, Part B premiums starts at $104.90 per month:
    • You will pay a higher premium if your income is higher than $85,000 for an individual and $170,000 for couples, increasing from there. See the Medicare Costs link below for the full income breakdown. 
  • Part B primarily covers physician services, outpatient care, home health services, and other medical services. Part B also covers some preventive services.
  • For Part B services you are responsible for an annual deductible of $147 (2014) then generally Medicare will pay 80% of approved charges and you are responsible for the remaining 20%.
  • You may also experience daily co-pays while in a skilled nursing facility (SNF) for rehabilitation or recovering from surgery or major trauma. For example, following hip replacement you may often be transferred to a SNF for rehabilitative therapy. Medicare generally will pay for the first 20 days of this "skilled" care and you are responsible for $152 (2014) per day for days 21-100.
    • Note: For Medicare to cover this service you must be a hospital in-patient for three days prior to moving to the SNF and must be transferred for the same condition for which you were hospitalized.

Keep in mind that this is a very simplified look at Medicare Parts A & B coverage. As you can see, there are a few areas of exposure that you are responsible for, this is why most people who choose to stay with Original Medicare also enroll in a Medicare supplement. These are also known as "gap" plans; to cover some or all of these areas ("gaps") of exposure.

Enrollment Periods (See "Medicare & You" pg. 19)

  • Initial Coverage Enrollment Period/Initial Enrollment Period: begins three months before you turn 65, the month of your 65th birthday and three months after. You may enroll in a supplement and drug plan, or Medicare Advantage plan.
  • Annual Enrollment Period: Runs from October 15-December 7 of each year with changes taking effect on January 1 of the upcoming year. You may make as many changes to your drug plan or Medicare Advantage, with the last application received by Medicare as your final choice.
  • Special Election Period: Begins the first month of your qualifying event. A few examples are: qualifying for Medicaid, moving out of the service area, involuntarily losing drug coverage, qualifying for low income subsidy and an enrollment based on incorrect or misleading information.

--Medicare and You booklet
--2014 Medicare Costs Page

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