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Navigating the waters of healthcare, especially Medicare can be particularly complicated. It’s important that you obtain information from a trusted resource, and if and when you need to speak with a licensed Medicare insurance professional, you can connect with one easily over the phone. If you would prefer to meet with a licensed Medicare specialist to have all of your questions answered in person, we can assist you with that. Simply call our toll free number to schedule an appointment.
Medicare was first created in 1965 and first implemented in 1966. The program as it existed before Obamacare worked well. But it still put many of our most treasured citizens over the age of 65 in a difficult financial position. They were not able to pay for the services or prescription medicines that they so desperately needed for a better quality of life.
An American over the age of 65 cannot sign up for a Medicare program through the Healthcare Marketplace. But the Obama Administration recognized the need to tweak many provisions of Medicare. This ensured that its participants were receiving the same exceptional care that other citizens are getting under the ACA. As a result, participants can now rest easier knowing that under Obamacare. Now, they will automatically receive preventive care services for free and healthcare that meets a minimum coverage standard.
Who is eligible for Medicare?
Medicare is only available for certain people. Among these are:
- Those over the age of 65 years old
- Those under the age of 65 who have a disability that qualifies them to get Social Security Income
- Those who receive benefits from the Railroad Retirement Board (RBB)
- Those with end-stage renal disease (ESRD)
- Those with amyotrophic lateral sclerosis (AML, or Lou Gehrig’s Disease)
Medicare.gov, the official governmental website for Medicare, offers a questionnaire to determine whether a person is eligible for Medicare benefits. People who receive benefits from Social Security or from the RRB are automatically enrolled in Medicare. However, those who qualify due to one of the previously mentioned illnesses must sign up for a Medicare policy.
Medicare Part D vs. Medicare Advantage Plans
Medicare Part D vs.
Want to Lower Your Rx Drug Costs? Here are 5 Simple Ways to Do It
Medicare can help to cover many of your medical costs as you age, such as medically necessary doctor visits, blood tests and hospital stays, but it doesn’t cover everything.
How to Make the Most of Drug Plans on Medicare
How to Make the Most of Drug Plans on Medicare.
Part D Donut Hole: What Happens Under Trump?
The Medicare Part D coverage gap, also known as the “donut hole,” presents a complex issue in healthcare.
Quality Payment Program Tool
As the payment model for healthcare services moves from a fee-for-service to a fee-for-value model, the Centers for Medicare and Medicaid Services (CMS) has rolled out a number of new metrics and tools to help track patient care for healthcare service providers.
What Are Medicare Advantage Plans and Should You Keep Yours?
Medicare Advantage plans, also called Medicare Part C, are insurance plans offered by private companies approved by Medicare.
CMS Updates Drug Spending Dashboard
In 2015, the Centers for Medicare and Medicaid Services released an online tool to check the prices of prescription drugs used by Medicare patients, and that tool has now been updated with the latest figures on spending.
What is the CMS Equity Plan?
In 2015, the Centers for Medicare and Medicaid Services (CMS) set out to help reconcile the perceived disparities in the care their funding provides to minority groups versus the rest of the general population.
Can You Buy Medicare on the Health Insurance Marketplace?
When former President Obama introduced the Affordable Health Act (ACA), he completely changed the way health insurance was sold and administered in the United States.
Rediscovering Medicare 2017
The Dept. of Health and Human Services (HHS), the agency responsible for Medicare, estimates that 57 million Americans are enrolled in this social health program. This includes people 65 years or older, disabled people under 65 and those with Amyotrophic Lateral Sclerosis (ALS, Lou Gehrig’s disease) and end-stage renal disease (ESRD). With this huge consumer base comes equally huge costs. The Office of the Actuary, which provides the HHS with estimates and analysis of healthcare financing and spending, predicts that total 2016 Medicare spending on benefits will reach $672.6 billion.
But with so many people relying on Medicare, this financial outlay is essential. As with any other programs, Medicare is continually being examined and improved. This includes all four parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage, private insurance plans) and Part D (prescription drug coverage). But even with past changes, those made in 2016 may be some of the most dramatic and far-reaching since Medicare was signed into existence by Pres. Lyndon P. Johnson in July 1965.
Below, we’ll discuss the major developments for Medicare 2016 and everything you need to know. Right now, these revisions include new payment and pricing changes, including how millions of enrollees were spared from enormous Part B premium and deductible increases. Other big changes involve coverage for specific procedures and end-of-life care and counseling and how patients receive medical care. These initiatives could redefine and improve the doctor-patient relationship, as well as Medicare enrollees’ overall experience.
Medicare Part B Increases Reduced For Millions
When it comes to Medicare 2017, everything you need to know right now about specific plan costs centers on financial relief. The Medicare Board of Trustees (the Board), which is responsible for the program’s financial health, revealed that Part B premiums and deductibles for an estimated 52 million enrollees’ (about 30 percent of all Part B members) would increase again in 2017.
There were three reasons for this:
- Part B spending was higher than expected
- Sufficient funding had to be reserved for the Supplementary Medical Insurance (SMI) Trust Fund
- Lack of a cost-of-living adjustment (COLA) for Social Security benefits in 2017.
Under Medicare’s hold harmless rule, 70 percent of all members don’t have to pay higher 2017 Medicare Part B premiums. These “hold harmless” members will pay only $104.90 per month, as in previous years.
The remaining 30 percent of enrollees include: those applying for Medicare Part B for the first time; those not currently collecting Social Security benefits; those with premiums paid by Medicaid (dual eligible); and those paying additional income-related premiums. In 2017, certain single and joint filers may have to pay monthly premiums of $134. But depending on their earned incomes, filers may have to pay:
- $187.50 per month: Single filers earning $85,000–$107,000; Joint filers earning $170,000–$214,000
- $267.90 per month: Single filers earning $107,000–$160,000; Joint filers earning $214,000–$320,000
- $348.30 per month: Single filers earning $160,000–$214,000; Joint filers earning $320,000–$428,000
- $428.60 per month: Single filers earning $214,000 and up; Joint filers earning $428,000 and up
However, on Nov. 10, 2015, Congress passed the Bipartisan Budget Act of 2015 (Public Law 114-74) . This spared enrollees from the much higher premium increases. So, in 2016, they only paid 16 percent more for Part B premiums – – $121.80, rather than 2015’s $104.90.This also includes a $3 repayment surcharge that will be added to monthly premiums over time to cover 2016’s reduced premiums. The premium increase from 2016 to 2017 was approximately 10%.
Relatedly, even if you’re in the group that was spared from paying higher monthly premiums for Part B coverage, you may still have to pay higher annual deductibles, which were raised in 2017 to $204, up from $166 in 2016. After your deductible is met, you’ll only be responsible for the co-insurance amount of 20% for medical services billed to Medicare.
End Of Life Care – A Big Concern For Medicare Recipients In 2017
There have been dramatic changes for end-of-life options for Medicare 2017. Everything you need to know right now concerned how patients were counseled, as well as their newer options. “End-of-life” refers to all healthcare provided in the days or years before death, no matter whether it’s sudden or due to a long-term terminal illness. The Centers for Disease Control and Prevention (CDC) estimates that of the 2.5 million people dying each year in the U.S., about 75 percent are ages 65 and older.
This makes Medicare the largest healthcare insurer during the last year of life. About 25 percent of all Medicare healthcare spending goes to these enrollees, many of whom have various serious and complex conditions. Medicare covers a host of services – both curative (for curing) and palliative (relieving pain, discomfort) — that can be utilized right up until members’ death. Among these are: care in hospitals and several other settings, home healthcare, physician services, diagnostic tests and prescription drug coverage.
Beneficiaries with a terminal illness also qualify for benefits that wouldn’t normally be covered under Original Medicare, such as bereavement and hospice services. End-of-life services are controversial, due to their costs and the difficult discussions and issues related. Originally, the Affordable Care Act (ACA) authorized voluntary, personalized counseling. But due to public outcry, this provision was quickly removed from the healthcare law. However, Medicare has reinstated this counseling.
Hospice benefits also play a part in Medicare 2017. Everything you need to know right now involves the program’s new Care Choices model. Previously, enrollees opting for hospice benefits had to give up most curative care. But the new model allows those with terminal illnesses to receive hospice services without giving up treatment. On Jan. 1, 2016, 70 hospices began offering these new services; another 70 will join in 2018. Medicare also began covering advance care planning as a separate and billable service in 2016. Advance planning involves discussions between healthcare providers and patients regarding end-of-life care and patient preferences.
Changes to ACO selection
In 2017, Medicare has focused on just how medical care is delivered to patients. Among the key areas are: teamwork among clinicians, particularly that of primary care doctors; the timeliness of preventive services; and patients transitions between hospital and home. Medicare estimates that almost 8 million beneficiaries (20 percent of Original Medicare) are currently enrolled in Accountable Care Organizations (ACOs).
ACOs are networks of doctors and hospitals with the goal of delivering better quality care at lower costs “Five years ago, there was minimal incentive to coordinate care,” said Patrick Conway, Medicare’s chief medical officer. “Physicians wanted to do well for their patients, but the financial incentives were completely aligned with volume.” With ACOs, networks get part of their reimbursement for meeting quality or cost targets; their long-term effectiveness is still being determined. But Medicare kicked off a major expansion for 2016. Enrollees can also select their own ACO, for the first time, and they can opt out if they prefer.
Joint Replacements’ Quality and Costs Examined
Another change to Medicare in 2016 is an experiment involving two types of joint replacements: hip and knee replacements. These are Medicare’s most common surgeries and in 2014, more than 400,000 beneficiaries received hip or knee replacements. The CMS estimates that these procedures cost more than $7 billion for the hospitalizations alone. And for Medicare, the average costs can vary widely within different geographic areas, ranging from $16,500 to $33,000. In addition, these surgeries require long recovery and rehabilitation periods. Their actual quality, in and out of the hospital, can also vary, depending on the area and facility.
As such, it’s understandable that efforts are being made to improve the procedures’ quality, while keeping costs down. In April 2016, hospitals in 67 metro areas and communities will take part in an experiment designed to manage these procedures’ total costs. The 90-day experiment will begin with the patient’s initial doctor’s visit, and encompass the surgery and rehabilitation.
If you have any questions at all, don't hesitate to call and speak with one of our healthcare professionals. Available 24/7 at 1-800-810-1437TTY 711
Medicare Enrollment Information
MEDICARE PART A
Medicare Part A has been dubbed the “hospital insurance”. Having Medicare Part A alone is sufficient under the Affordable Care Act (ACA) to comply with the minimum requirements. Despite that fact, Part A is usually used in combination with another insurance policy, such as Medicare Part B, which covers general medical services.
Part A – Original Medicare
‘Hospital Insurance’ that covers hospital care & prolonged stays.
PARTIAL COVERAGE FOR:
- Ambulance Services
- Inpatient Hospital Stay
- Skilled Nursing Care
- Home Care
- Mental Health Care
Medicare Part A is used to cover: inpatient hospital stays, hospice stays, home healthcare nurses, mental health inpatient stays and skilled nursing facility stays. The cost of inpatient hospital stays and mental health inpatient stays is explained in detail in the following paragraph. The participant must pay 20 percent of the total cost of home healthcare services and any necessary medical equipment; the Medicare Part A plan will pay the remainder.
Regarding hospice care, the participant may have to pay, at most, 5 percent of the cost of the hospice care. They may also have to pay as much as $5.00 for each prescription drug used during the hospice stay to relieve pain or control symptoms. The cost to stay in a skilled nursing facility varies per day. Day 1 through 20 is included in your policy. Day 21 through 100 will cost $164.50 per day and any day beyond 101 must be paid entirely by the participant.
If the patient is being admitted for inpatient care, which is typically defined as a stay that will last longer than two full days, up until the 90th day, Medicare Part A will cover the claim, either in whole or in part. To be more specific, Medicare Part A will cover in full, other than a one-time annual deductible of $1,316.00, days 1-60 of an inpatient hospital stay. The days are counted individually and do not need to be consecutive days in the hospital. Absolutely no coinsurance is required during this period of time.
From days 61-90, Medicare Part A will pay for all but $329 per day of the claim; this can be paid by coinsurance, a Medicare Medical Savings Plan or the patient. Any hospital stay that extends past day 90 will cost the patient or coinsurance $658 per day. These additional days are categorized as “lifetime reserve days,” and each Medicare recipient only has 60 lifetime reserve days over his or her lifetime. Every additional day in the hospital past the 90 days during a benefit year, plus the 60 lifetime reserve days over the patient’s lifetime, will not be covered by Medicare. Medicare will recommence coverage the following benefit year, however.
Medicare Part A will not cover the costs of a private duty nurse, a private room, unless medically required or any extra perks during a hospital stay, such as television, phone or personal care items. In addition to the actual bed and medical care, Part A will also cover the cost of meals, general nursing care, medicines prescribed while in the hospital, inpatient rehab facilities and mental health care.
A person is supposed to enroll for Medicare Part A when they first become eligible. Among the eligibility factors are:
- They reach age 65
- They receive disability benefits through Social Security (SS) or Railroad Retirement Benefits (RRB)
- They receive disability for end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS, or Lou Gehrig’s Disease)
A person eligible due to their age may first enroll: three months before their 65th birthday; during the month of their 65th birthday; and for the three months following their 65th birthday, for a total of seven months. A person eligible due to receiving disability benefits may first enroll: during the three months before the 25th month after first receiving those disability benefits; on the 25th month of receiving disability benefits; and for the following three months after the 25th month.
If they miss the deadline, a person can enroll during the general enrollment period, which is between January 1 and March 31 each year. There may be a penalty of paying a higher premium for Part A if a person does not enroll when first eligible. There are also special circumstances that will trigger a Special Enrollment Period (SEP). This allows a participant to enroll outside of the normal deadlines.
An SEP is defined as a period of time when a participant is still working for a company that covers them under their insurance policy. A person can sign up for Medicare at any time during their employment or within eight months after the insurance policy under their former employer is canceled or the employment ends, whichever is sooner. This allows them to sign up for Medicare without penalty or tax.
In order to sign up for a Medicare Part A plan, you can either call directly or visit your local Social Security Administration (SSA) office. Although the Centers for Medicare & Medicaid Services (CMS) actually manages Medicare, it utilizes Social Security offices to carry out the enrollment process.
MEDICARE PART B
Medicare Part B is referred to as the “medical insurance”. Having Part B alone is NOT sufficient to meet the minimum standard mandated under Obamacare. It must be combined with Part A or another healthcare policy in order to avoid a tax for noncompliance.
Part B – Original Medicare
‘Medical Insurance’ that covers doctors’ visits & outpatient care.
PARTIAL COVERAGE FOR:
- Doctor Visits
- Preventative Care
- Outpatient Services
- Lab Testing
- Medical Equipment
Medicare Part B covers general medical services, like lab tests, surgeries and doctors visits that are not part of an inpatient hospital stay that would ordinarily be covered under Part A.
More specifically, a claim will likely be covered under Part B if you have a claim that resulted from:
- A service
- The necessity to obtain a supply that related to the diagnosis or treatment of a medical condition
- Obtained healthcare services to prevent illnesses or detect them at an early stage.
In addition, Medicare Part B will cover all but 20 percent of the cost for clinical research studies. This will only advance science and medical advancements to ensure that future patients have access to the best and most revolutionary healthcare services and prescription medicines. Part B will also cover all but 20 percent of the cost for emergency ambulance services to the hospital or transportation to a skilled nursing facility. However, the nearest medical facility must be able to provide the care that the patient needs.
Finally, Medicare Part B will pay for all but 20 percent of the cost for any durable medical equipment prescribed by the patient’s doctor for in-home use. Examples of durable medical equipment would be: crutches, braces, hospital beds, home oxygen equipment and supplies, wheelchairs, walkers and prosthetic devices.
Medicare Part B will cover all but 20 percent of the cost of outpatient mental healthcare, while Part A would cover the costs of any inpatient mental healthcare required. Part B also covers all but 20 percent of the costs of certain vaccination shots and particular types of prescription drugs that relate to various medical conditions. A full list of drugs covered by Part B can be found on Medicare.gov.
Similar to Part A, a person is supposed to sign up for Medicare Part B as soon as they reach the age requirement or the 25th month of receiving disability benefits. The required enrollment period starts three months before the person’s 65th birthday or 25th month anniversary. It includes the actual month of the birthday or anniversary and ends three months after the birthday and anniversary month, for a total of seven months.
Again, if they miss the initial deadline, a person can enroll during the open enrollment period (OEP), which lasts between January 1 and March 31. There will likely be a tax for not signing up for Medicare when first eligible. A person may also sign up for Medicare Part B outside of the OEP.
They can also sign up after first becoming eligible if they meet the requirements of a Special Enrollment Period (SEP). An SEP occurs if someone is receiving health insurance through their employer. Or, they can qualify for an SEP if: they sign up for Medicare Part B within eight months after their employment ends, or of their insurance through their former employer terminates, whichever comes first.
Again, any person who wishes to sign up for a Medicare Part B plan must do so through the SSA office. This agency handles the enrollment process for CMS.
MEDICARE PART C
Medicare Part C is also known as the Medicare Advantage Plan or “MA Plan”. It is provided by a corporate health insurance company in the form of an HMO or PPO plans. Any Medicare Part C plan offered by a private health insurance company must basically include the same coverage as Medicare Part A and B do individually. This is a requirement of Obamacare.
Part C – Medicare Advantage
‘Private Insurance’ in the form of an HMO or PPO plan that combines Medicare Parts A & B along with additional coverage.
OFTEN FULLY COVERS:
- Dental Care
- Vision Exams
- Hearing Exams
OFTEN PARTIALLY COVERS:
- Eye Glasses
- Hearing Aids
- Prescription Drugs
A person is required to sign up for a Medicare Advantage (Part C) plan either: during the seven-month span around their 65th birthday or the seven-month span around the 25th month that they first started receiving disability benefits. The clock for this seven-month period begins three months before the month that the event (birthday, disability) occurs. It includes the actual month of the event and ends three months after the event.
If a person fails to enroll when they are first eligible they can enroll during the Open Enrollment Period (OEP). Open enrollment for Medicare Part C runs from October 15 through December 7. A person who is enrolled in Part C and wishes to switch to a Part A or Part B Medicare plan can do so from January 1 to February 14. This same time period applies to those who wish to switch to a different insurance company for their Medicare Part C plan.
There are some difference between Medicare Part C through a private insurance company and Medicare Part A and B, which is run through Medicare. In particular, Part C does not offer hospice care. Furthermore, some Part C plans cover more than Part A and B do. For instance, some Part C plans offer prescription drug coverage that is similar to a Part D plan. Some Medicare Part C plans could also offer dental and vision coverage, which is not included in a Part A or B plan.
Medicare gives insurance companies money each month, per member, to offset the overall cost of coverage to the participant. This is different than Original Medicare plans (Part A and B), which are managed by and claims are paid directly by the CMS, Therefore, the cost of Part C is typically as affordable as Part A and B.
Every Medicare Part C plan varies in cost and coverage, based on the insurance company. A participant should read their policy limits very carefully to determine things, such as whether a procedure is covered, whether you have a deductible and whether a doctor is within your plan’s network.
If a participant opts for a Part C plan that has a high-deductible plan, they may choose to sign up for a Medicare Savings Account (MSA). MSA is explained in further detail below.
MEDICARE PART D
Medicare Part D is used to cover prescription drug needs and is associated with a private health insurance company. A participant can also get prescription drug coverage through their Medicare Part C plan. The purpose of Part D is to subsidize the costs of generic and name brand prescription drugs.
Part D – Drug Coverage
‘Private Insurance’ that provides prescription drug coverage that may be included as part of a Medicare Part C plan.
- Generic Drugs
- Brand Name Drugs
- Specialty Drugs
DOES NOT COVER:
- Vitamins & Minerals
- Weight Loss Drugs
- Non-FDA Drugs
The fact that certain drugs are discounted more than others also benefits the participant. They are then able to shop around and compare the prices of name brand and generic medications, based on what best fits their financial constraints.
A newly qualified Medicare participant must also sign up for their prescription drug coverage when they first become eligible. Their failure to do so will mean that the participant must pay a tax on top of their normal premiums when they do sign up outside of the enrollment period. The OEP for Medicare Part D for a person with Medicare Advantage runs from October 15 through December 7. Medicare Part D open enrollment for a person with traditional Medicare (Part A and Part B) runs from April 1 to June 1.
A person who wishes to switch their Medicare Part D plan to a different insurance company can do so from January 1 to February 14. Otherwise, Medicare requires the participant to sign up for a drug prescription plan (either through Part D or Part C). This enrollment period starts within three months before and after turning 65 years old or three months before and after the 25th month of receiving SS or RRB disability benefits.
Technically, the term of enrollment lasts seven full months and commences three months prior to the month that the Medicare enrollment necessity event is triggered. The month that the Medicare enrollment is triggered is month four; the three months subsequent to month four equate to seven months.
An important effect of Obamacare on participants’ prescription drug coverage is that it is designed to diminish the burden imposed by the “donut hole.” This is defined as a gap in coverage, whereby the participant must pay all of their prescription drug costs. A participant does not fall into the donut hole until they have reached a certain threshold. This is $3,700 in 2017, spent both individually for deductible payments and by the Part D plan.
Under Obamacare, no Medicare Part D plan may impose a yearly deductible that exceeds $400.00 in 2017. Generally, the deductible amount, if there is one at all, varies per drug plan.
After the participant reaches the coverage gap, Medicare Part D will pay only 49 percent of the price for generic drugs in 2017; the participant is responsible for the remainder. Under Obamacare, the amount that the Part D plan will pay will increase each year. And, the amount that the participant is responsible to pay will decrease until the year 2020, when the participant will only be responsible for 25 percent of the costs of generic medications.
Part D will pay for 60 percent of brand-name drugs and the participant is responsible for 40 percent of the costs during the period of time that the participant is within the donut hole. Although Plan D will cover a larger percentage of a brand name drug, the overall cost of these drugs is much higher than generics. As such, it may not be financially feasible for many people.
The participant will get out of the donut hole and can utilize a catastrophic insurance policy after they have paid a total of 4,950.00 in 2017 out-of-pocket in a calendar year. The catastrophic coverage will pick up a larger majority of the cost of prescription drugs and will only pass a small coinsurance or copayment amount to the participant.
Medicare Plans Costs
Free To $413.00 Cost per month for 2017
Medicare Part A Plan Cost
If a participant or the participant’s spouse paid Medicare taxes for at least 10 years prior to retiring, there is no premium for Medicare Part A, because the person earned 40 credits. This is also called “premium-free Part A.” A participant is also eligible for premium-free Part A if they receive Social Security or Railroad Retirement Board disability benefits or have an end-stage renal disease.
If, however, the participant did not pay Medicare taxes while working, the cost of Medicare Part A is approximately $407 per month for the 2015 calendar year because they earned less than 30 credits. This price may increase in 2016. If the person earned between 30-40 credits, their premium for 2015 will be $224.00 a month.
$134.00 To $428.60 Cost per month for 2017
Medicare Part B Plan Cost
Although Medicare plans can range in cost, Medicare.gov has published an estimate of what its participants are paying on average, per plan. According to a review of premiums for 2017, the average cost of Medicare Part B is approximately $134 per month. The average deductible for the 2017 calendar year for Part B is $204 per year.
The monthly premium may increase, depending on the participant’s annual income on their tax return. For 2017, a participant that made between $85,000 – $107,000 on their individual return or between $170,000 and $214,000 on their joint tax return will pay $187.50 in monthly premiums for Medicare Part B. The monthly premium will increase as the annual income amount increases.
According to Medicare.gov, if a person makes more than $214,000 on their individual tax return and more than $428,000 on their joint tax return, the monthly premium will cap at $428.60 per person. To determine a participant’s monthly premium level, Medicare examines the tax return for two years prior. Therefore, to determine the 2017 income level Medicare would look at the participant’s tax return for 2015.
Free To $200+ Cost per month for 2017
Medicare Part C Plan Cost
As stated previously, the cost of a Part C plan will vary, depending on the company and type of plan chosen. You will need to compare plans and prices, depending upon each insured’s medical conditions and financial circumstances.
Remember that you must have Medicare Parts A & B in order to obtain a Medicare Advantage Part C plan.
Free To $76.20 Cost per month for 2017
Medicare Part D Plan Cost
The monthly premium for Medicare Part D also varies, depending on the participant’s income level. Again, the annual income is determined by examining the income tax return from two years prior to the year in question.
If a person makes less than $85,000 on their individual tax return or less than $170,000 on the joint tax return, the cost of the Part D plan is included in the cost of the Part A and B premium. If the participant makes between $85,000 to 107,000 on their individual tax return or between $170,000 and $214,000 on their joint income tax return, the monthly premium for Part D will be $13.30, in addition to the Medicare Part A and B monthly premium.
Again, the costs of Part D will vary and increase as the participant’s annual income increases. Any participant that claimed more than $214,000 on their individual tax return and more than $428,000 on their joint income tax return will pay the highest premium for Part D, which is $76.20 a month, plus their monthly premiums.
Supplemental Medicare Plans
The monthly premiums for the different Medicare plans are generally seen as affordable to participants. However, what can be unaffordable and financially taxing is the deductibles and copayments. For this reason, many participants opt to take on Medigap insurance, in addition to their traditional Medicare plans. The cost of the Medigap policy varies, depending on the insurance company and the type of coverage offered.
Medigap policies are offered by private insurance companies and will cover things that Part A and B do not cover. They also help deflect some of the costs of coinsurance, copays and deductibles incurred from Part A and B plans. Medigap insurance will typically cover claims accrued outside of the United States, as well.
If a person has a Medicare Savings Account (MSA), they cannot have a Medigap insurance policy. It is against the law for an insurance company to write a Medigap policy if the participant also has an MSA.
Medicare Savings Account
Some Medicare Part C plans offer high deductibles and will not begin full coverage of claims until the deductible is satisfied. In these instances, many participants also choose to take on a Medicare Medical Savings Account. An MSA is a special type of savings account designed to help pay high annual deductibles.
An MSA is set up with a private insurance company, and the actual account is set up with a bank of the plan’s choosing. The plan then deposits some money into the account. The participant is also encouraged to deposit money in the account as available. The money in the account is safe and secure and is also not taxed upon withdrawal, so long as the money is used to cover healthcare-related expenses, such as deductibles or copays. The participant will be required to submit a special form with their annual tax return that explains how the money was used in order to avoid income taxation.
At the end of the year, any money left over in the MSA will either roll over to the next year, or it can be withdrawn. If withdrawn and not used for healthcare-related purposes, the money will be taxed as income.
Are dental and vision care covered by Medicare?
Generally, neither dental nor eye care is covered under Medicare Part A or B. However, they can be covered if there is some special type of care received during a hospital stay, in which case, it would fall under the Part A coverage.
Some Medicare Part C plans may cover dental and eye care. If so, a person can use the money in their Medicare Medical Savings Account to cover the costs of dental and eye care. Otherwise, a person may have to pay for a private dental or eye care insurance policy in order to get these types of services covered.
Why Medicare works with private insurance companies
In some instances, a person may choose to have insurance through both Medicare and also a private insurance company in order to ensure the best coverage. In these instances, there are specific rules to determine which policy will pay a claim first. This is also called a “coordination of benefits.”
Traditionally, the primary payer, which is oftentimes the private insurance company, will pay up to their policy limits on a claim. Then, they will send the remaining amount on the bill to the secondary payer, the Medicare policy.
The History of Medicare
Under the leadership of President Lyndon B. Johnson, Congress passed Medicare in 1965. Medicare was part of the Social Security Act. It was designed to benefit and promote the health and wellness of citizens who were over the age of 65, without consideration of their income level and medical history. Prior to the creation of Medicare, our senior citizens were faced with monthly insurance premiums that were often three times the cost of their younger counterparts.
The concept of Medicare has remained the same for almost 50 years. However, the quality of coverage has increased over the years, as amendments have been passed requiring Medicare to cover more for the participants. For instance, hospice care only became a requirement in 1984, and the eligibility requirements were expanded in 2001 to allow persons younger than 65 who had certain diseases to obtain Medicare coverage.
Medicare Part A is funded in large part by the payroll tax levied on employers and employees (the Medicare Tax). Part B and Part D costs are partially funded by the premiums paid by the participant. The portion of the federal budget allocated to Medicare spending is growing each year as more baby boomers become eligible to enroll in Medicare. Additionally, the average life expectancy of our senior citizens is increasing, as medical and scientific advancements are made in society.
If you have any questions at all, don't hesitate to call and speak with one of our healthcare professionals. Available 24/7 at 1-800-810-1437TTY 711