What you need to know about what Medicare covers and the cost of that coverage
Medicare is federal health insurance for U.S. citizens (and green-card holders who have lived here for at least five years) who are 65 or older.
Medicare is administered through the Centers for Medicare and Medicaid Services (CMS), and enrollment is through the Social Security Administration. To sign up for Medicare, visit www.cms.gov
Some people are automatically enrolled in Medicare when they turn 65, while others need to sign up. Generally, if you are a U.S. citizen who is 65 and receives Social Security, you will automatically be enrolled.
Otherwise, the initial enrollment period is the seven-month period that begins three months before you turn 65.
“Open Enrollment,” when anyone who is eligible can enroll, is from Oct. 15 - Dec. 7.
With Original Medicare, you are covered in the U.S. when you visit any doctor or hospital that accepts Medicare.
Medicare consists of four parts. Only Part A and B are required. Only Part A is free.
Here is a breakdown of what’s covered and the costs.
Medicare Part A
Medicare Part A is often considered “hospital insurance. Here is what it helps cover:
▪ Inpatient hospital care
▪ Skilled nursing facility
▪ Hospice
▪ Lab tests
▪ Surgery
▪ Home health care
Cost of Part A: Most people don’t pay a Part A premium because they paid Medicare taxes while working. If you don’t get premium-free Part A, you pay up to $458 each month.
Medicare Part B
Medicare Part B is often considered “medical insurance,” and helps cover:
▪ Doctors, other healthcare providers
▪ Outpatient care
▪ Medical equipment (wheelchairs, walkers, hospital beds, etc.)
▪ Preventative services (flu shots, vaccines, screenings, wellness visits, etc.)
▪ Ambulance services
Cost of Part B: Each year the Medicare premiums, deductibles, and co-payment rates are adjusted according to the Social Security Act. The standard Part B monthly premium in 2020 is $144.60 (up from $135 in 2019) or higher, depending on your current income and other factors.
The annual deductible for all Medicare Part B beneficiaries is $198 in 2020, an increase of $13 from $185 in 2019. The premium for Medicare Part B, $144.60 per month in 2020, is projected to rise to $153.30 in 2021.
Medicare Part D
Medicare Part D (optional) helps cover prescription drugs.
Part D is offered to everyone with Medicare. Even if you don’t take any prescription drugs now, it’s recommended that you still get Part D, because if you want to enroll in Part D after the enrollment period, you’ll have to pay a late penalty fee for as long as you have Medicare drug coverage.
An important thing to note is that plans that offer Medicare drug coverage are run by private insurance companies that follow rules set by Medicare.
Cost of Part D: What you still owe for drugs, after reimbursement by Medicare, depends on the plan you choose.
According to Seema Verma, the administrator of CMS, Part D premiums for 2021 have decreased and will now ring in at $35.50/month, on average. If you have limited income and resources, you may qualify for help to pay for some healthcare and drug coverage costs through the federal government’s Extra Help program.
Medigap
Medigap (optional and also known as Medicare Supplement Insurance). Original Medicare pays for a lot, but not all, of the costs of healthcare.
Medigap/supplemental policies are sold by private insurance companies and can help pay for some of the remaining healthcare costs such as co-payments, coinsurance, and deductibles.
The price of Medigap/supplemental insurance varies by plan.
