Medicare | A Beginner’s Guide

Medicare is broken up into four parts.

Part A – covers hospital costs. There is a deductible, ($1068.00) in 2009. The deductible is per benefit period. You can have multiple benefit periods in a year. There is usually no premium associated with Part A, as long as you or your spouse has worked for forty quarters (ten years). There are also copays, $267.00 a day for days 61-90 (2009), and $534.00 days 91 and beyond (2009). Part A will also cover things such as Skilled Nursing facility (copays apply).

Part B – covers medical (doctors). There is a deductible, ($135.00) in 2009. This deductible is per year. There is usually a premium for Part B. It is 96.40 per month for 2009, unless you make over $80,000.00 for a single person, and then the premium increases. After the deductible, Medicare generally pays 80% of the “approved amount”, and you or your supplement would be required to pay 20%. If the doctor does not accept “assignment”, you and or your supplement may be required to pay and additional 15% above the 20% you already paid.

Part C – Medicare Advantage – Private health plans with a yearly contract with Medicare. The plans encompass Parts A & B and sometimes D. Pays instead of original Medicare. These are offered in different forms such as HMO, where you are limited to in network doctors only, PPO, where you can go in or out of network (for a higher cost) or PFFS (Private Fee for Service), where you can see any doctor or hospital that accepts Medicare, as long as they agree to accept it. Acceptance can be on a case by case basis.

Part D – Prescription Drug Coverage – Plans are offered by private insurance companies. Medications are broken up into “Tiers” and the copays will vary. There is also a “coverage gap” associated with these plans.

Medigap – Private insurance that pays after Medicare. Plans vary and can cover deductibles and copays, depending on the plan you choose. These plans are standardized by the Federal Government. They are lettered A through L. No matter what company you go to, a plan with the same letter designation will offer the exact same benefits. While the benefits are the same, prices can vary widely.

Medicare Supplement – Same as Medigap. Private insurance that pays after Medicare. Plans vary and can cover deductibles and copays, depending on the plan you choose. These plans are standardized by the Federal Government. They are lettered A through L. No matter what company you go to, a plan with the same letter designation will offer the exact same benefits. While the benefits are the same, prices can vary widely.

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