Medicare can conjure up all sorts of emotions and questions. As a seasoned Medicare specialist, I’ve heard just about everything from “Now I have free healthcare!” to “How am I going to pay for my insulin medication?” Knowing the basics and educating yourself will help take some of the fear out of the process.
1. What Is Medicare Premium-Free Part A?
People usually don’t pay a monthly premium for Medicare Part A, also commonly referred to as hospital insurance or “premium-free Part A.” This is coverage you earned if you or your spouse paid Medicare taxes for a certain amount of time while working. Most people get premium-free Part A.
You qualify for premium-free Part A at 65 years old if
- You already get retirement benefits from Social Security or the Railroad Retirement Board
- You’re eligible to get Social Security or Railroad benefits but haven’t filed for them yet
- You or your spouse had Medicare-covered government employment
You can also qualify for premium-free Part A if you’re under 65 years old if
- You have received Social Security or Railroad Retirement Board disability benefits for 24 months
- You have end-stage renal disease (ESRD) and meet certain requirements
2. What Are Medicare Part A Premiums?
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 $274 or $499 each month in 2022 depending on how long they or their spouse worked and paid Medicare taxes. If you choose not to buy Part A, you can still buy Part B.
In most cases, if you choose to buy Part A, you must also have Medicare Part B (Medical Insurance) or pay monthly premiums for both Part A and Part B
Pro Tips: I know this can be overwhelming. In short, Part A covers inpatient care in a hospital, skilled nursing facility care, nursing home care (inpatient care in a skilled nursing facility that’s not custodial or long-term care), hospice care, and home health care.
3. What Is Medicare Part B?
The main thing you should know about Medicare Part B is that it will cost you. Some people automatically get Medicare Part B (Medical Insurance) and some people need to sign up for Part B. If you don’t sign up for Part B when you’re first eligible, you may have to pay a late enrollment penalty. If you aren’t sure if you will automatically receive Part B or you have to sign up, contact the Social Security Administration and request your Medicare information.
You pay a premium each month for Part B. Your Part B premium will be automatically deducted from your benefit payment if you get benefits from one of these: Social Security, Railroad Retirement Board, or the Office of Personnel Management. If you don’t get these benefit payments, you’ll get a bill from Medicare to pay your premiums for Part B (Medical Insurance).
4. What Does Medicare Part B Cover?
Medicare Part B covers medically necessary services. It covers services or supplies that are needed to diagnose or treat a medical condition and meet accepted standards of medical practice. The coverage also includes preventive services, for example, any doctor’s visits to prevent illness (like the flu) or detect it at an early stage — when treatment is most likely to work best. You pay nothing for most preventive services if you get the services from a health care provider who accepts your case.
Pro Tip: For a quick snapshot, Medicare Part B covers services such as clinical research, ambulance services, durable medical equipment (DME), mental healthcare, inpatient and outpatient care, partial hospitalization, and limited outpatient prescription drugs.
5. What Will Medicare Part B Cost Me?
The standard Part B premium amount in 2022 is $170.10. Most people pay the standard amount. If your modified adjusted gross income as reported on your IRS tax return from two years ago is above a certain amount (which varies year to year), you will pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium. The Social Security Administration will notify you if you are being assessed IRMAA.
In 2022, you pay $233 for your Part B deductible. After you meet your deductible for the year, you typically pay 20 percent of the Medicare-approved amount for most doctor services (including most doctor services while you’re a hospital inpatient), outpatient therapy, and durable medical equipment (DME).
As you can see, there are many gaps and liabilities that need to be filled when it comes to Medicare. I have seen the benefits of talking to a Medicare specialist. After walking through this with my clients, they have a sense of understanding and feel better able to make informed decisions.
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