Medicare Parts A and B comprise what is called Original Medicare. Part A covers hospitalization, skilled nursing, home health care and hospice. Part B is your Medical Insurance and covers doctor visits, outpatient care, durable medical equipment and home health care. It also covers preventive services. Original Medicare does not cover most eyeglasses, hearing aids, hearing exams, medical care outside the US or nursing home and long-term care costs. There are long-term policies you can buy to care for you in your old age; again, Medicare does not cover long-term care. In general, Medicare covers 80% of your medical expenses although sometimes it kicks in for the full 100% for a portion of days, say the first twenty of skilled nursing, and after that, only 80%. So what do you do when it comes to covering yourself for the other 20%? One, you can choose to pay out-of-pocket, or two, you can buy a Medicare Supplement Plan, also called a Medigap plan.
Your cost per month? For Part A, if you worked a minimum of 10 years, you already paid it in your taxes. If not, you will learn the premium when you sign up. For Part B, your monthly premium is automatically deducted from your social security check: The standard Part B premium for 2012 is $99.90. People earning more than $85,000 per year pay more, according to income. There is also a $140 annual deductible.
Part D is Prescription Drug coverage. You would buy this from private companies at the same time you enroll in Original Medicare A and B or you can add it at a later time. Trust me, you will be flooded with mail from these companies around the time you get your initial Medicare packet to complete, three months before you turn 65.
Your cost per month? On average in New York state, drug plans run between $19 and $39 per month.
Part C, which is known as Medicare Advantage, is an alternative to Original Medicare; it combines Parts A and B and usually Part D (drug coverage). Medicare Advantage is offered by private insurance companies that have been approved by Medicare. Some Medicare Advantage plans cover hearing, dental, vision, wellness but this varies with each company. MA plans range from HMO’s to PPO’s. In HMO’s you can only go to the doctors on your plan’s list. A PPO, which will cost you more each month, covers you if you use in network doctors and hospitals, and you can pay quite a bit if you go out of network. Medicare Advantage plans often require you to get a referral to go to a specialist and you have to hope that specialist is in your network. Each plan has its own rules and you would be wise to check the plan you are interested in very thoroughly. Coverage for travel outside the US is often not covered–so do look into this if you are planning to travel. If you have Medicare Advantage, you may not be sold a Medigap plan because Medicare Advantage plans generally cover many of the same benefits that a Medigap policy would cover, such as extra days in the hospital after you have used the number of days that Medicare covers.
Your cost per month? Since you are dealing with private companies, you must call to get your premium cost.
What if you’re not happy with the plan you sign up for? You can make changes to your Medicare health or prescription drug coverage between October 15—December 7 each year, which is why ‘baby boomer on electric guitar’ ads flood the airwaves every fall. That means you can switch from original Medicare (A & B) to a Medicare Advantage Plan, and vice versa, you can enroll in a Part D drug plan if you never had one, you can switch your Part D plan to another insurance company or you can drop Part D altogether and pay drug costs out of your own pocket. Any changes you make, take effect on January 1 of each year.