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

• Is generally free, based on the recipient's work history.
• Under Part A, if you are hospitalized as an in-patient, you are responsible for the Medicare Part A deductible of $1,156 per stay (2012). 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. (www.Medicare.gov)

Part B

• For 2012, Part B premiums is $99.90 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.
• Part B primarily covers physician services, outpatient care, home health services, and other medical services. Part B also covers some preventive services. (www.Medicare.gov)
• For Part B services you are responsible for an annual deductible of $140 (2012) 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 $144.50 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.

- See Medicare Supplements