ABCD’s of Medicare | Silver Shield Ins

The ABCD'S of Medicare

Part A – Hospital Services

Medicare Part A beneficiaries receive coverage for hospital expenses that are critical for inpatient care. These include a semi-private room, nursing services, meals, medications required during inpatient treatment, and other related services and supplies from the hospital.

Medicare Part A insurance DOES NOT cover a private hospital room, private-duty nursing, or personal care items such as shampoo, telephone, and television. It also does not cover the cost of blood unless the hospital receives blood from a blood bank without a charge. For hospitals purchasing the blood, the cost of the first three units is the beneficiary’s responsibility.

Coverage Includes:

Inpatient Hospital Care
Hospice Care
Skilled Nursing Facility
Nursing Home Care – Provided if Custodial Care is not the only care required
Home Health Care – Conditioned Home Health Services

Costs Associated with Part A:

Monthly Premium – $0 If Medicare Taxes were paid for 10 years
Annual Deductible – The amount changes annually.
Inpatient Hospital & Skilled Nursing Co-Pays
20% Co-Insurance – The portion of Covered Medical Expenses that Medicare does not pay

Part B – Outpatient / Physician Services

Medicare Part B beneficiaries receive coverage for medical expenses that are important for outpatient health care. Anyone eligible for Medicare Part A is qualified for Medicare Part B by enrolling and paying a standard monthly premium (premium tiers based on Modified Adjusted Gross Income two years prior to enrolling).

Coverage Includes:

Physician Services
Outpatient Surgery
Lab & X-ray Services
Ambulance Services
Some Preventive Services
Durable Medical Equipment

Costs Associated with Part B:

Medicare Part B Monthly Premium – The amount changes annually
Annual Deductible – The amount changes annually
20% Co-Insurance – The Covered Medical Expenses Medicare does not pay
Any late penalties incurred from not obtaining Part B Coverage when first eligible

Part C – Medicare Advantage Plans

One of the options a Medicare beneficiary has as a resource to tackle Original Medicare’s Co-Insurance, Co-Pays, and Deductibles is using a Medicare Advantage plan, also known as Part C.

Medicare Advantage plans are Medicare approved insurance plans offered through private health insurance companies. They combine Original Medicare, Part A, Part B, and generally Part D into one plan.

Enrolling in a Medicare Advantage plan requires a person to first enroll in Original Medicare Part A & Part B and to reside in the plan’s service area.

Medicare Advantage plans, at a minimum, include all benefits, services, and coverages outlined in Original Medicare.

If a person enrolls in a Medicare Advantage plan, they must continue to pay their Part B premium to the Social Security Office. This is a great option for reducing the exposure to Medicare’s 20% co-insurance. By selecting a Medicare Advantage plan, the insurance company becomes your primary insurance, and by doing so, it has very distinct advantages and disadvantages, such as:

Advantages:

Part D is generally included
Provides predictable out-of-pocket costs
May include extra benefits not provided by Original Medicare

Disadvantages:

Working within a network may be required
Normally, working with a Primary Care Physician is necessary
May require a referral to see a Specialist

Two Types of Medicare Advantage Plans: HMO or PPO

HMO – Health Maintenance Organization:

Covers eligible services from providers and facilities inside the network only, except in an emergency
As a rule, uses a network of providers/facilities within a specified geographical area
In-Network, Out-of-Pocket expenses are limited
Out-of-Network expenses are mostly out-of-pocket
Normally, require a Primary Care Physician
Typically, require a referral to see a Specialist
Generally, require pre-authorization for procedures

PPO – Preferred Provider Organization:

Cover eligible services for providers and facilities inside the network
Cover eligible services for providers and facilities outside the network (at a lower amount than in-network)
Have broad network with nation-wide coverage
Out-of-Pocket expenses are limited
Normally, do not require a Primary Care Physician
Typically, do not require a referral to see a Specialist
Generally, do not require pre-authorization for procedures

Part D – Prescription Drug Plans

Part D Prescription Drug plans are Medicare-approved plans offered through private health insurance companies. These plans are either found as a Stand-Alone Prescription Drug Plan or included in a Medicare Advantage Plan (Part C).

Part D Prescription Drug plans cover brand name and generic medications supplied by a pharmacy. Coverage varies by plan, and each plan has a formulary. A formulary is a list of the drugs covered by that plan.

The Costs Associated with Part D:

Part D monthly plan premium
Deductible
Co-pay
Costs associated with the CMS Part D Coverage Stages (see below)
Any late penalty incurred from not obtaining Part D Coverage when a person is first eligible

Understanding Medicare Part D Coverage Stages:

Annual Deductible: At this stage, prescriptions are paid by the beneficiary until the deductible is met. Not all Part D Plans have a deductible. If the plan does NOT have a deductible, the coverage starts with the first filled prescription.

Initial Coverage: At this stage, the beneficiary pays a co-pay, and the plan pays the rest. This stage continues until the *Total Drug Costs reach the amount set by CMS for that calendar year.

Catastrophic Coverage: In this stage, after the *Total Out-of-Pocket Costs reach the amount set by CMS, only a small copay or coinsurance is owed. This stage continues for the rest of the calendar year.

Total Drug Costs: Equals the amount a beneficiary pays (deductible and co-pay) and what the plan pays for prescription drugs each calendar year. It does not include the plan premiums.

Total Out-of-Pocket Costs: Equals the amount the beneficiary pays, including the deductible for prescription drugs each calendar year. The total out-of-pocket costs also include the discount paid by the drug manufacturers during this stage. It does not include the plan premiums.

Note – The Part D deductible and coverage gap do not apply when a person qualifies for Extra Help.

Medicare Supplement Insurance Plans

A Medicare Supplement Insurance plan helps “fill the gap” by partially or fully covering expenses that original Medicare Part A and Part B don’t cover.

For instance, Medicare Part B generally covers 80% of Part B expenses. You’re responsible for the remaining 20%. A Medicare Supplement insurance plan will partially pay your share.

Medicare Supplement Insurance plan benefits are “standardized.” The differences between companies is their premium rates, financial stability, and their customer service.

Advantages:

You can choose any doctor, specialist or facility that accepts Medicare
No referral required

Disadvantages:

Monthly premium (in addition to Part B premium)
Does not include prescription drug coverage (Part D)