Medicare Basics

What is Medicare Part A?

• Medicare part A provides coverage when an individual is admitted into the hospital.
• There is no cost for Medicare Part A if you have worked at least ten quarters or qualify from your spouse’s work history
• Apply in the three month period before the month you turn 65. Coverage will start on the first day of your birth month
• Instructions on how to apply for Medicare can be found here

What are the deductibles and co-insurance amounts that I am responsible for with Medicare Part A?

• You will be expected to pay a $1,556 deductible for every hospital stay
• For days 61-90 you will be expected to pay a $389 co-insurance per day
• For days 91+ you will be expected to pay a $748 co-insurance per day
• Many Medicare Supplemental plans will pay these deductibles and co-insurances for you

What is Medicare Part B?

• Medicare Part B will be your outpatient/doctors coverage and pays approximately 80% of the Medicare bill for approved outpatient services
• Medicare Part B will cost most people $164.90 per month. Some will pay substantially more if they have a higher income. The government looks back at your AGI from two years prior to determine your Part B premium
• Medicare Part B has a $226 deductible that you are responsible for before they pay the 80%
• High income earners will pay an Income Related Monthly Medicare Adjustment (IRMMA) which is a fancy way of saying a high income penalty. You can appeal this amount if your income drops. Your premium will drop automatically after two years of lower income.
• Many of the Medicare Supplemental plans will pay the 20% co-insurance for you
• Instructions on how to apply for Medicare can be found here

What is Medicare Part C?

Medicare Part C refers to a Medicare Advantage plan. This is a very different way of getting your health insurance.  Medicare Advantage plans take the place of Medicare Part A & B although you still have to pay for part B. Advantage plans combine your healthcare and prescriptions coverage. Be mindful that Medicare Advantage plans require you to stay in a network, see their doctors and have a potentially higher out of pocket costs from (deductibles, co-insurance and co-pays). Always ask what the Maximum Out Of Pocket (MOOP) is the for the year when evaluating a plan. Typically it can be a few thousand a year.

In many zip codes Medicare Advantage plans can be had for free and in certain areas the plan may even rebate some of your part B premium. Note: you cannot have a Medicare Supplement and a Medicare Advantage plan at the same time. Read a more detailed description of Medicare Advantage plans here.

What is Medicare Part D?

Medicare Part D provides prescriptions drug insurance for Medicare eligible individuals. Unlike Parts A & B, where it is a one size fits all, Medicare Part D is regulated by the government but purchased from an insurance company.

The government will charge you a lifetime penalty if you do not enroll in a Medicare Part D plan. The amount of the penalty increases for every month you do not have coverage. NOTE: you may defer coverage if you have a group plan that offers creditable prescription coverage.

There are three items that you must pay attention to when determining the proper Medicare Part D plan.

1. Premium: this simply refers to the monthly cost to be enrolled in the insurance
2. Deductible: this refers to the amount you must pay before the insurance kicks in. For 2023 the amount on most plans is $505.
3. Co-Pays: this refers to the amount you will pay when purchasing your prescriptions at your pharmacy

Learn more about Medicare Part D here.