Medicare ABC(&D)s


As many of our clients reach retirement, they begin to have questions around Medicare coverage. Since the costs associated with health care are a large factor in a financial plan, it becomes increasingly important to understand the details around Medicare coverage the closer to the big “retirement date.” Here is a basic breakdown of Medicare: Parts A,B,C and D. 

Part A: Hospital Insurance

This insurance is designed to help cover the following: inpatient care in hospitals, including rehabilitation facilities, care provided in a skilled nursing facility or hospice for a limited period and home health care.

For inpatient hospital care, Medicare typically covers a semi-private room, meals, general nursing, drugs, and other hospital services and supplies. Medicare typically does not cover long-term care or custodial care in a skilled nursing facility, although under limited circumstances, it may cover a maximum of 100 days during a benefit period if a doctor certifies that a patient needs daily skilled care.

Part B: Medical Insurance

Part B helps to cover physician services, outpatient care, preventive services, durable medical equipment, and certain home health care. Although the scope of Part B is extensive, there are many services — such as dental care, routine eye exams, hearing aids, and others — that are not covered as part of this program

Part C: Offered by Private Insurers

Also known as  Advantage plans, Part C consists of insurance plans provided by private carriers. For beneficiaries with Part C, Medicare pays a fixed amount every month to a private insurer for their care. Many Advantage plans include drug coverage, and all cover emergency and urgent care. In addition, certain plans may cover services that are not covered, which may result in lower out-of-pocket fees for beneficiaries.

Part D: Prescription Drugs

There are generally two ways to obtain Medicare prescription drug coverage. If you have Original Medicare (Part A plus Part B), you can add drug coverage by obtaining it from an insurer approved by Medicare through Part D. Or if you have an Advantage plan, find out whether your plan includes prescription coverage as part of its program. Even if you don’t take many prescriptions, you may want to consider signing up for Part D as soon as you become eligible. If you wait and try to sign up during a subsequent enrollment period, you may be charged a late enrollment penalty and be forced to pay higher premiums.

Source: FPA.com; Medicare.gov

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