Learn About Medicare

Original Medicare consists of Part A (hospital insurance) and Part B (medical insurance). Most people get premium-free Medicare Part A if they (or another qualifying person like a spouse or former spouse) have paid into Medicare for at least 40 quarters while working.

Medicare Part B has a monthly premium (cost) to pay. Most people pay a standard monthly premium set annually by the Centers for Medicare and Medicaid Services (CMS). If you have a high Modified Adjusted Gross Income above the established threshold, you may also pay an additional Income Related Monthly Adjustment Amount (IRMAA) for Medicare Parts B and D. If you have limited financial resources, assistance may be available to help pay your Medicare costs.

Original Medicare covers most medically necessary services, but there are several gaps in terms of deductibles, copays and co-insurances that are left uncovered, including a generally 20% co-insurance on Part B services, with no out of pocket limit on spending.   Also, prescription drug coverage is not included.

For this reason, many people on Original Medicare choose to add a Medicare Supplement/Medigap Plan to help fill some or most of the gaps left by Original Medicare and a Prescription Drug Plan to help pay for their medications.

With Original Medicare plus a Supplement, Original Medicare will pay generally 80% of Medicare approved charges, and then bill the Supplement for the remaining charges, which may be paid according to the benefit schedule of the Supplement plan that you choose.

With Original Medicare, you can see any doctor or specialist who accepts Medicare, and there are no networks or referrals needed.

Some of the common items not covered by Original Medicare include routine dental, hearing and vision services, long term (custodial) care, annual physicals (although Wellness visits and many preventative services are covered), cosmetic surgery and care outside the U.S.

It is important to get your Medicare coverage according to the prescribed timelines and rules, as you may be subject to late Enrollment Penalties if you do not get your Medicare parts A, B or Prescription Drug Coverage in a timely manner.

Medicare Supplement (also known as Medigap) plans are insurance policies that help pay the “gaps” left by Original Medicare (Parts A and B) — like deductibles, copays, and coinsurance.

Key things to know:

·  You must be enrolled in Medicare Parts A and B to have a Supplement/Medigap plan.

· You must be a U.S. Citizen or be lawfully present in the U.S.

• You keep Original Medicare as your primary coverage, and your Supplement plan helps cover what Medicare doesn’t.

• You can see any doctor or hospital in the U.S. that accepts Medicare — no networks or referrals needed.

• Plans are standardized (labeled with letters A-D, F, G, K-N) meaning each letter plan offers the same basic benefits no matter which company you buy from. (With exceptions for MA, WI and MN, which standardize their plans differently.)

• With Original Medicare plus a Supplement, Original Medicare will pay generally 80% of Medicare approved charges, and then bill the Supplement for the remaining charges, which may be paid according to the benefit schedule of the Supplement plan that you choose.

• Does not include prescription drug coverage — you’ll need to add a separate Part D plan if you want drug coverage. If you don’t get creditable drug coverage when you’re first eligible for it, (or have it through another way) you’ll face a penalty.

• Guaranteed acceptance if you get a Supplement when you’re first eligible for it. – You could be denied or pay more for a plan based upon your health later.

• Has a monthly premium that increases over time.

• Typically works best for people who travel often, prefer nationwide access, and want predictable out-of-pocket costs.

Part D plans provide coverage for prescription medications. These are offered by private insurers and can be purchased as a standalone plan with Original Medicare (with or without a Medicare Supplement/Medigap plan) or included in a Medicare Advantage plan.

Key things to know:

• You must be enrolled in Medicare Part A or Part B

• You must live in the plan’s service area

• You must be a U.S. Citizen or lawfully present in the U.S.

• You must enroll during a valid election period

• Each plan has a formulary, or list of covered drugs arranged in tiers.

• Plans differ in monthly premium, deductible, and copay/co-insurance amounts.

• You’ll typically pay less for medications if you use in-network pharmacies or mail-order options.

• Choosing the right plan depends on your specific prescriptions and where you prefer to fill them.

• If you don’t get creditable drug coverage when you’re first eligible for it, (or have coverage through another way) you’ll face a penalty.

• There are 3 phases of coverage with Prescription Drug Plans:

  • Deductible Phase - you pay full cost of your prescriptions until you reach the deductible amount. Deductibles vary from plan to plan, and may only apply to certain tiers of medications on some plans.

  • Initial Coverage Phase - You pay the copays or co-insurance amounts for your medications as noted in your plan. When your out of pocket spending reaches a maximum of $2000 in 2025 or $2,100 in 2026, you enter the Catastrophic phase.

  • Catastrophic phase in this phase, the plan pays 100% of the costs for the covered medications for the remainder of the plan year. Plans reset on January 1 of each year.

• The Medicare Prescription Payment Plan (MP3) is available to spread out prescription drug costs throughout the year if needed. (optional)

• Plans change yearly, so it’s important to review your plan during the Annual Enrollment Period (October 15 - December 7)

Medicare Advantage plans are all-in-one alternatives to Original Medicare. These plans are offered by private insurance companies approved by Medicare and often include extra benefits.

Key things to know:

·       You must be enrolled in Medicare Parts A and B to have an Advantage Plan

·       You must live in the plan’s service area

·       You must be a U.S. Citizen or be lawfully present in the U.S.

·       Your Medicare benefits are provided through a private plan (HMO, PPO and others)

·       Most plans include prescription drug coverage (Part D) built in.

·       Many offer extra benefits like dental, vision, hearing, fitness programs, and more.

·       You usually need to use doctors and hospitals in the plan’s network (except in emergencies).

·       Prior Authorization or referrals may be needed for some medical services

·       No health questions or pre-existing condition exclusions.

·       You may pay low or even $0 premiums, but out-of-pocket costs can vary based on how you use care.

·       You pay for health care “as you go” according to the schedule of benefits provided by the plan.

·       Plans and benefits change annually, so reviewing your plan each year during the Annual Enrollment Period is important.

·       You cannot have both a Medicare Advantage plan and a Medicare Supplement plan at the same time.