Medicare is a national health insurance program for people age 65 or older, people of all ages with disabilities, and people with End-Stage Renal Disease (ESRD) or Lou Gehrig's Disease (ALS).
People with Original Medicare are called beneficiaries. Beneficiaries can go to any doctor, supplier, hospital, or other facility that accepts Medicare and is accepting new Medicare beneficiaries.
Beneficiaries with Original Medicare are responsible for a deductible and coinsurance for most covered services. The deductible is the amount a beneficiary is responsible for before Medicare begins to pay for services covered under the Original Medicare program. Once the deductible is met, the beneficiary is responsible for a coinsurance- it is an 80% Medicare / 20% beneficiary split.
There are no maximum out-of-pocket limits for Original Medicare.
To lower and contain potential medical costs, beneficiaries may choose to purchase supplemental coverage in the form of either:
* Medigap and a stand-alone Prescription Drug Plan (Part D)
* Medicare Advantage plan, usually with Part D included
Medicare beneficiaries are required to have Prescription Drug Coverage. If you do not have coverage at least as good as Medicare Part D from an employer, union, or military, you will have to pay a penalty for each month you don’t have Part D coverage.
Medicare is made up of four parts. The following information is to help you understand each part of Medicare.
Eligible individuals are automatically enrolled in Part A with no premium. Others apply to the program when they are eligible, or pay a monthly premium if they have worked less than 40 quarters (or 10 years) in their lifetime.
Physician services in the hospital, personal care items, private rooms (unless medically necessary), phone, television, and custodial care, such as assistance with eating, bathing, and getting dressed.
There are some limitations of the number of hospital days covered for inpatient hospital coverage. Days 1-60 in a hospital stay are covered after a deductible is met. Days 61-90 are covered with a copay charge per day. Day 91 and after use up to 60 lifetime reserve days with a copay charged per day. Once the reserve days are used, an additional 365 days can be accessed at a $0 copay per day. Providers must accept Medicare and be accepting new patients.
To obtain Part B, an eligible individual must enroll at their Social Security office or online during a specific period (usually 90 days before your birth month, the month of, or up to 90 days after). There are special enrollment periods in addition to turning 65.
Learn more about Medicare Part B PremiumRoutine vision, alternative healthcare, routine hearing screening exams, preventive or restorative dental services, routine chiropractic care, prescription drugs, and first three pints of blood.
Part B only covers care for eyes, teeth, or hearing when medically necessary. No coverage for custodial care, such as assistance with eating, bathing, and getting dressed. No coverage outside the United States.
Sometimes called an “All in One” plan, Medicare Advantage plans are a way to get Medicare benefits through private companies approved by and under contract with Medicare.
Hospice Care (still provided by Original Medicare). It’s important to review each plan carefully to see what it does and does not cover.
Coverage options vary by plan and plan type. It’s important to review options carefully. Medicare Advantage plans do not have the same network as Original Medicare.
Part D is voluntary and is designed to supplement Part A and B coverage that does not include Part D benefits. Stand- alone Part D plans are plans that specifically help cover and lower prescription drug costs. Stand-alone Part D plans are available through private companies that contract with Medicare. If an individual does not have creditable coverage (coverage equal to Original Medicare) they are subject to a penalty for each month they are not enrolled.
Drug classes that are not on the Medicare formulary and certain drugs that are covered under Part B.
Coverage options vary by plan and plan type. It is important to review options carefully as each plan determines tier placement of drugs and network of pharmacies.
Note on employer group coverage:
Many people use Original Medicare as a supplemental insurance plan to their current employer group plan benefits. Original Medicare can work with employer group insurance plans to contain the cost of care. When Original Medicare and employer group plans work together, one plan is primary and the other is secondary depending on the size of the employer.
Medicare Part A Hospital: Coverage associated with any hospital or surgical facilities.
Medicare Part A is the hospital insurance portion of Original Medicare. Hospitalizations make up some of the largest costs associated with medical care. The cost of care while hospitalized can add up to large dollar amounts in a matter of days.
Medicare Part A is generally "free" or 'pre-paid' if the work history requirements have been met.
The Medicare Part A deductible in 2024 is $1,632 and is applicable to days 1-60. Once the deductible is paid, days 61-90 are covered with a copay of $408 per day. Day 91 and after use up to 60 lifetime reserve days at a copay of $816 copay per day. Once the reserve days are used, an additional 365 days can be accessed at a $0 copay per day. Providers must accept Medicare and be accepting new patients.
Medicare Part B Medical: Coverage associated with physician office visits, testing, a select number of prescription drugs, and DME (durable medical equipment).
Medicare Part B is the medical portion of Original Medicare, with the focus area of care on physician office visits. Physician office visits to primary care and specialists, x-rays, labs, scans, and chemotherapy are a few areas covered under Part B. Coverage also extends to DME (Durable Medical Equipment). DME includes wheelchairs, canes, walkers, oxygen supplies and C-pap equipment.
As previously stated, the average cost of Part B for 2024 is $174.70 per month, per person. This cost can be higher depending on earned income.
Under Original Medicare Part B, a deductible of $240 is required and a 20% coinsurance is owed for services completed after the deductible is met.
Medicare Part C: Referred to as Medicare Advantage plans
Medicare Part C a.k.a. Medicare Advantage plans are plan benefits offered by private insurance companies. Medicare Advantage plans are designed to lower the out-of-pocket costs associated with Original Medicare; and in some cases, offer additional services not provided by Original Medicare.
With Part C a.k.a. Medicare Advantage, insurance plans are purchased with private insurance companies that have designed benefits that meet or exceed Medicare minimum guidelines. The benefits include, but are not limited to, prescription drugs, hospital services, physician services, mental health services, preventive dental, vision, and hearing.
Monthly insurance premiums for Medicare Advantage plans range depending on location. In Oregon, plan premiums generally range between $0 and $150 per month. The Medicare Part B premium must also be paid.
Medicare Part D: Prescription Drug benefits
Medicare Part D benefits were created in 2006. Part D benefits exist to provide coverage and lower costs for Medicare approved prescription drugs; generally, those prescription drugs ordered at a retail or mail order pharmacy.
Part D benefits are required (or a penalty will be incurred) in the form of either a stand-alone Part D plan or as an embedded benefit in a Medicare Advantage plan. There are exceptions to this rule; including, but not limited to, access to Veteran benefits.
Medicare Supplement Plans a.k.a. Medigap plans
Medicare supplement plans are often referred to as Medigap plans. Medigap plans are designed to pay as secondary to Original Medicare and supplement the deductibles and coinsurance of Original Medicare benefits. Medigap plans available to new enrollees after 2020 are Plan A, B, D, G, HDG, K, L, M, N. Plan C, F, and HDF are only available if eligible for Medicare Part A & B prior to January 2020.
Medigap plans do not include Part D benefits and therefore require the purchase of a separate stand-alone Part D plan. Medigap plans do cover the select prescription drugs covered by Medicare Part B.
Medigap plan premiums in Texas range depending on age, zip code, sex, tobacco status, and plan selected.
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