Medicare and You

If you are new to Medicare, you may not know that there are four parts to the Medicare program:

• Medicare Part A, Hospital insurance
• Medicare Pathert B, Medical Insurance
• Medicare Part C, Medicare Advantage plans (includes Part A and Part B of Medicare) 
• Medicare Part D, Prescription Drug plans

Part A is paid by a portion of your Social Security tax. Part A helps for inpatient hospital care, skilled nursing care, hospice care, and other services.

Part B is paid by your monthly premium. Part B helps pay for doctors' fees, outpatient hospital visits, and other medical services and supplies that are not covered by Part A. 

Original Medicare consists of Medicare Part A and Part B. It pays approximately 80% of services provided and the Medicare beneficiary pays the remaining 20%. While beneficiaries can choose their own physician and hospital, they cannot predict out-of-pocket expenses. You will have an unlimited risk. 

Part C, Medicare Advantage plans, is a combined plan of Part A, B,C and sometimes D. You have a max-out-of-pocket to protect you from paying more for your expenses. You must have both Part A & B.

Part D (prescription drug coverage) is voluntary and costs are paid to a private carrier with a monthlty premiums. 

The following people qualify for Medicare.

• People who are over age 65 and getting Social Security automatically qualify for Medicare Part A and B.
• People who will be reaching age 65 but are not receiving Social Security qualify, but must enroll for Medicare Parts A and B.
• People who have been receiving disability benefits for two years qualify.
• People who have amyotrophic lateral sclerosis (Lou Gehrig's disease) and receive disability benefits qualify.
• People who have permanent kidney failure and receive maintenance dialysis or kidney transplant qualify.

Most people get Medicare Part A and Part B automatically starting on the first day of the month they turn 65, provided they are getting benefits from Social Security or Railroad Retirement Board.

When you're first eligible for Medicare, you have a 7-month Initial Enrollment Period to sign up for Part A and/or Part B.If you're eligible for Medicare when you turn 65, you can sign up during the 7-month period that:

• Begins 3 months before the month you turn 65
• Includes the month you turn 65
• Ends 3 months after the month you turn 65

People under 65 with disabilities get Part A and Part B automatically after getting disability benefits for 24 months.

People with amyotrophic lateral sclerosis (Lou Gehrig's disease) get Part A and B the month their disability benefits begin.

People who are reaching age 65 but are not getting Social Secuirty or Railroad Retirment Benefits need to sign up for Parts A and B. 

Most people do not pay for their Part A coverage. You usually don't pay a monthly premium for Medicare Part A (Hospital Insurance) coverage if you or your spouse paid Medicare taxes for a certain amount of time while working. This is sometimes called "premium-free Part A."

If you don't qualify for premium-free Part A, you can buy Part A.

People who buy Part A will pay a premium of either $259 or $471 each month in 2021 depending on how long they or their spouse worked and paid Medicare taxes. 

Premiums for Part B are set by the federal government, and the standard Part B monthly premium in 2021 is $148.50. You may pay a higher monthly premium in some situations, such as if you have income above a certain level ($88,000 for an individual, $176,000 for a married couple who file taxes jointly).

If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you'll pay the standard premium amount of $148.50 and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.

In  2021, you pay $203 for your Part B deductible. After you meet your deductible for the year, you typically pay 20% of the Medicare-approved amount for these:

• Most doctor services (including most doctor services while you're a hospital inpatient)
• Outpatient therapy
• Durable Medical Equipment (DME)