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Understanding the Mysterious World of Medicare

What does the number 65 mean to you? If you are like most seniors approaching 65, you know it means you are eligible for Medicare. Becoming Medicare-eligible is a milestone, and it is a helpful tool to have when it comes to your health and quality of life, but it is confusing. Medicare Part A, B, C, D – what’s the difference? Millions of Americans have Medicare, proving that it is possible to navigate the Medicare system and achieve the coverage you need, but the following tips will help too.

Starting from the Top: Part A

Medicare Part A and B are the two parts that make up what you might hear referred to as Original Medicare. According to Medicare Made Clear, Part A covers the “hospital charges and most of the services you receive when you’re in the hospital.” It doesn’t cover specific fees charged by doctors, which is where Part B comes in. However, Part A only covers 60 days, after which you will be responsible for some of the cost. Some examples of the services Part A covers include room, meals, operating/recovery room services, and any labs, tests, drugs, medical supplies, and equipment used as an inpatient. It is also worth noting that your Part A premium will be $0 if your or your spouse worked and paid Medicare taxes for at least 10 years.

On to Part B

Medicare Part B works alongside Part A, covering what it doesn’t. Part B covers outpatient services such as lab work, diagnostic testing, preventative care screenings/vaccines, doctor’s visits, annual wellness checks, chemotherapy, and durable medical equipment to name a few. Unlike Part A, you will be required to pay a premium for Part B coverage. The amount you pay is dependent on your annual income threshold, and you will also be responsible for paying co-pays, deductibles, and coinsurance, but you typically only pay 20 percent after you meet your deductible.

Part C: Medicare Advantage

Original Medicare provides a great deal of coverage, but you may find that you could benefit from a Medicare Advantage plan that supplements your coverage. With a Medicare Advantage plan, you receive both Part A and B coverage. So, what makes it different from Original Medicare? The difference comes in the bonus benefits you receive. For example, Humana Medicare Advantage provides dental and vision coverage, prescription coverage, and even SilverSneakers fitness programs. The benefit in having a Medicare Advantage plan is that it helps fill any gaps in your health coverage you would experience with just Original Medicare. Most plans have low premiums too, some as low as $0, making an Advantage plan worth looking into.

Part D is for Prescriptions

Medicare Part D refers to your prescription drug coverage. Even if you don’t currently take any prescription drugs, enrolling now can help you lock in that low premium and ensures you are covered if and when you need it. Keep in mind that your co-pay will be dependent on what tier your prescription falls under, with tier 1 being generic and tier 4 being expensive or rare drugs. Typically, you are responsible for meeting your deductible and paying copays, but once you reach $3,750 in drug costs, you enter the dreaded doughnut hole. At this point you will pay 25 percent of the cost until your out-of-pocket spending reaches $5,000. You then enter the catastrophic level of coverage, where you’ll see yourself paying no more than 5 percent. To offset the costs, be sure to ask your doctor if any of your prescriptions have a generic alternative. If it must be brand name, inquire with your doctor about a discount. Many pharmaceutical companies provide discounts to consumers and doctor’s offices, and some offer a pharmaceutical assistance program. Consider having your prescriptions mailed to you as opposed to picking it up at the pharmacy, as your Part D plan may offer a discount for doing so. Medicare provides coverage and peace of mind. However, it can be a source of stress and worry if you don’t educate yourself. Spend time getting to know all the parts of Medicare to help you choose the right option for you.

Guest Article by Sharon Wagner