What Does Medicare Cover?

By on March 22, 2021

As you approach 65 years old, it’s wise to think about your plan for healthcare upon retirement. For most employees, the employer’s insurance usually stops on the month of retirement. You’ll then be automatically enrolled on Medicare, or you’ll be required to apply for it.

No matter your case, it’s vital to understand what Medicare covers. This helps to ensure that whatever part you’ll pick will be adequate for your needs. It will also allow you to determine if you’ll need additional cover.

What is Medicare?

Medicare is a federal insurance program that covers the health care costs of people aged 65 or older. It also covers certain younger people with disabilities and those with End-Stage Renal Disease (ESRD). It has four different parts: A, B, C, and D. Medicare offers parts A and B, while private insurance companies offer parts C and D.

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Part A

Part A is basically hospital insurance. It covers inpatient care, skilled nursing facility care, hospice care, and some home care services. For this part, you’ll need to pay coinsurance and a deductible or copayments.

This plan doesn’t have monthly premiums if you or your spouse paid taxes for a specific amount of time while working. It’s mostly known as “premium-free Part A,” and it’s the option most people receive.

If you don’t qualify for the premium-free option, you can still buy Part A. As of 2021, you can pay $259 or $471 per month for the plan. Your specific payment depends on how long you or your spouse paid the Medicare taxes.

In most cases, you’ll also need Part B if you pay for Part A. This means you’ll need to pay premiums for both plans.

Part B

Medicare Part B is medical insurance, and it covers several things, including preventive services, outpatient care, medical supplies, and specific doctor’s services. Part B may cover different services and items, but several rules must apply.

In most cases, you’ll pay 20 percent of the approved amount for any service. There can also be a deductible. This plan has monthly premiums, which are automatically deducted from Social Security, the Railroad Retirement Board, or the Office of Personnel Management benefits.

If you don’t have any of these benefits, you’ll receive a bill. As of 2021, the plan costs $148.50 per month. This is the basic amount, and you can pay more if your joint file return is above $176,000. Generally, the highest you can pay is $504.90 per month.

Part C

Also known as Medicare Advantage or MA Plan, Part C provides an alternative to the Original Medicare (A and B). It’s provided by private insurance companies, which are Medicare-approved. It’s vital to note that you still have Medicare when you opt for Medicare Advantage.

Basically, it combines parts A and B and adds prescription drugs. This plan is customizable to offer individual benefits and meet the unique needs of enrollees. Click here for a more in-depth answer on what Medicare Part C is if it’s something you’ll want. 

 Different providers may offer different plans, so be sure to check their individual benefits before making your decision. You should also check their limitations and qualification requirements. Some of the common plans include:

  • Health Maintenance Organization (HMO) Plans  
  • Preferred Provider Organization (PPO) Plans
  • Special Needs Plans (SNPs)
  • Private Fee-for-Service (PFFS) Plans

Still, there are more other plans out there. Your provider will help you understand the specific details of each plan before selecting one.

Part D

Medicare Part D provides coverage for outpatient prescription drugs. It covers a wide range of drugs that Medicare enrollees may take, including drugs used to treat HIV/AIDs and cancer. 

Most drug plans have a list of drugs they cover. So, it’s vital to note that not all providers cover the same types of drugs. Still, you can change your specific drug list within the year to try newly released drugs, adhere to new medical information, or adapt to your therapy changes.

Understand Your Desired Medicare Plan

It’s vital to make sound decisions about your health, especially after retirement. Fortunately, most people get automatically enrolled on Medicare, allowing them to continue receiving health benefits. You have the option to receive additional coverage if you have more health needs. Be sure to take the time to understand the details of each plan.

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What Does Medicare Cover?