If these terms are new to you, don’t feel overwhelmed. Medicare is a maze, but it can be conquered. You just need to take it one step at a time.
The purpose of Medicare is to provide health insurance to seniors and those with disabilities.
You are eligible for Original Medicare if you’re a U.S. citizen or have been a permanent resident for at least five consecutive years. Although you can qualify for Medicare benefits early due to certain disabilities, most people are eligible at 65.
Original Medicare, also known as Traditional Medicare, has two parts: Part A and Part B. The federal government provides these parts, which means coverage is the same for every enrollee.
What does Original Medicare cover?
Your Part A benefits are your inpatient hospital benefits. They include a stay in a semi-private room, three daily meals, skilled nursing, hospice, and some home health care.
Medicare Part B is your outpatient medical coverage. This includes doctor visits, specialists, surgeries, physical therapy, durable medical equipment, and more.
With both parts of Original Medicare, you’d have hospital and medical coverage, but you’re not covered at 100%. This means you will have costs that you’re responsible for, such as deductibles, copays, and coinsurance, and there is no cap on your expenses.
For example, Part A and Part B have deductibles that must be met first before Medicare kicks in. Once Medicare kicks in, Medicare will pay its portion, and then you’ll pay the remaining balance for your approved services.
With Original Medicare, you can see any physician or facility that accepts Original Medicare.
How much does Original Medicare cost?
A common misconception about Medicare is that it’s free because you’ve paid it through payroll taxes while working. However, that’s not exactly true. If you worked at least ten years or 40 quarters in the U.S., you’d qualify for premium-free Part A. However, if you didn’t have that many work quarters, you could pay $505 or $278 monthly, depending on the number of quarters you worked.
While most people pay $0/month for Part A, there is a standard base premium for Part B that all enrollees pay. That standard premium in 2024 is $174.70 monthly, but if your income was previously higher, you could pay more for Part B.
If you’re receiving Social Security benefits while enrolled in Medicare, your monthly Part B premium will be deducted from your check. If you’re not receiving Social Security benefits when enrolled in Medicare, you typically pay quarterly for Part B.
What is Medicare Advantage?
Medicare Advantage is also known as Medicare Part C. Private insurance companies offer these plans. Suppose you have Medicare Parts A and B. In that case, you can enroll in a Medicare Advantage plan and begin receiving your Medicare benefits from the Advantage plan rather than the federal government. Advantage plans offer an alternative way to receive your Medicare benefits. You can learn more about the top 2024 plan choices by visiting https://boomerbenefits.com/best-medicare-advantage-plan-2024s-top-choices-explained/.
What do Advantage plans cover?
Medicare Advantage plans must offer the same benefits you receive from Original Medicare. This includes your inpatient hospital services and outpatient medical services. Additionally, most Advantage plans offer drug coverage, so you don’t need a separate drug plan.
They can also offer added benefits that Medicare doesn’t cover, like routine dental, vision, and hearing coverage and a gym membership. Some plans can even offer coverage for transportation, meals, and a Part B give-back benefit. However, added benefits vary with each plan, so not all plans offer the same added services.
When enrolled in an Advantage plan, you’ll want to see physicians who accept your specific plan as there is a network of providers.
How much do Medicare Advantage plans cost?
Most Medicare Advantage plans have monthly premiums as low as $0/month, but they could be higher. The important thing to remember is you must continue paying your Part B premium even if you’re enrolled in an Advantage plan.
With an Advantage plan, you’ll have out-of-pocket costs for your services. These could be in the form of a copay or coinsurance, depending on the plan and service. Your cost-sharing could vary with each plan since the carriers determine how much you’ll pay for services.
Additionally, Medicare Advantage plans offer a maximum out-of-pocket limit, so your costs will be capped during the year. Once you meet your plan’s limit, you will be covered 100% for covered services for the rest of the year.
Know the differences
As you learn about Medicare and your plan options, you’ll want to weigh the pros and cons of each option to determine what is best for your needs.
