Medicare 101

For 2023…..

MEDICARE PART A

  • Free monthly cost for most people
  • You pay $1,600 deductible for hospital stays for 60 days. This comes up every 60 days you’re NOT in the hospital
  • You pay $400/day, days 61 to 90. You pay $800/day, days 91 to 150. All costs after.

MEDICARE PART B

  • “Doctor Insurance”
  • Most people pay $164.90 per month from their Social Security. Some people with higher income will pay more.
  • You pay a yearly deductible of $226
  • After the yearly deductible is met, you pay 20% of physician charges, Medicare pays the remaining 80%. There is NO LIMIT to your liability

MEDICARE PART C

  • “Combination Insurance”. True Medicare, but administered by private insurance providers, contracted by Medicare
  • Combines your A, B and often, your D coverage into one plan
  • Monthly premiums vary by company
  • Any premiums paid for A & B coverage must also be maintained

MEDICARE PART D

  • “Prescription Drug Insurance”
  • Also true Medicare, but administered by private insurance companies, contracted by Medicare.
  • Not mandatory to have, but if taken at a later point in life (instead of when you first become eligible), you may pay a perpetual fine, based on the number of months you were eligible for coverage, but didn’t have it.
  • Premiums and coverage vary by carrier and plan.

WHAT IS THE DONUT HOLE?

Starting at the beginning of the year, once the total cost of your prescriptions reaches $4,660, you go into the “Donut Hole”

The Donut Hole lasts until you have spent $7,400 out of pocket. During that time in the Hole, both brand name and generic drugs are sold at a 75% discount. Once out of the hole, generic drugs will cost $4.15, brand name drugs $10.35 or 5% whichever is higher.

Q: WHAT ARE SUPPLEMENTS?

A: Supplements are insurance plans sold by private insurance companies that SUPPLEMENT your Medicare A and B coverage. In other words, for a monthly premium, and depending on what plan you choose, they pay some or all of the costs of Medicare that you would otherwise pay for out-of-pocket. They ARE NOT Medicare!

Q: WHAT IS THE DIFFERENCE BETWEEN A SUPPLEMENT AND A MEDICARE ADVANTAGE PLAN, ALSO KNOWN AS MEDICARE PART C?

A: Both Supplements and Medicare Advantage plans serve to “plug the holes” or limit the financial liabilities you have in basic original Medicare. One is NOT better than the other, they are just different. Both are offered through private insurance companies. Supplements work with your original Medicare to pay some or all of the costs you would otherwise pay for out-of-pocket. You pay a monthly premium for your supplement. If you want drug coverage, you must pay for a Part D Plan on top of your supplement costs, as supplements do not cover prescription drugs. Medicare Advantage Plans (aka Medicare Part C) REPLACES your A & B coverage, so that Medicare Part C becomes your primary insurance. Medicare Advantage Plans usually have a relatively inexpensive monthly premium, and utilize coinsurance or copayments when you go to the doctor or need other types of healthcare. They are also frequently bundled with prescription drug coverage as well, so that you have one plan that covers all of your healthcare needs. Medicare Advantage plans are often, but not always, more cost effective for the beneficiary.

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