Medicare Supplement Coverage

When you turn 65, you will most likely be enrolled automatically in Medicare Part A and have the opportunity to sign up for Part B.

Part A covers most inpatient hospital care, skilled nursing facility care following a hospital stay, some home health care, and hospice. You will most likely NOT pay any monthly premium for Part A, but there will be deductibles and co-pays for the services you receive.

Part B covers doctor's bills, outpatient surgeries and diagnostics, ambulance services, and durable medical equipment. For Part B. you will pay a monthly premium that is the same for everyone regardless of age, gender, or health. If you receive treatment from a doctor/facility that has agreed to be reimbursed the Medicare approved amount for services, Part B pays about 80% of the cost and you will be responsible for paying the remaining 20%. This is similar to private health insurance coverage you may have had before Medicare. Prescription drug costs, with very few exceptions, are NOT covered under traditional Medicare.

As we get older and experience more health issues, the out-of-pocket deductibles and co-pays and prescription costs add up fast. To help cover these expenses, many people opt to buy supplemental insurance plans from the private market.

A Medicare Supplement Plan, also known as a Medigap Plan, does NOT replace traditional Medicare. Rather, it is designed to pay the deductibles and the co-pays thereby filling certain "gaps" not covered by Parts A and B. Medigap plans will typically have monthly premiums that can vary depending on your age, gender, location, and health. This monthly premium is paid in addition to the Medicare Part B premium. If you have the traditional Medicare along with a supplemental Medigap policy, you can choose your own doctors (provided they accept Medicare coverage) and in most cases will have very little out of pocket expenses after your premiums are paid.

One "gap" not filled by supplemental Medigap policies is prescription drug expenses. This "gap" can create very large out-of-pocket expenses if you have to buy your prescribed drugs. Therefore, most traditional Medicare participants will choose to enroll in a Prescription  Drug Plan also known as Medicare Part D. Medicare Part D is a government designed program, but plans are offered and administered by private insurance companies. Acceptance is guaranteed in you enroll at age 65. You will pay a monthly premium for a Part D plan based on where you live and the type of prescriptions you need.

How You Pay for Medicare

Each part of Medicare has different charges associated with it.

For Part A, those who have had Medicare taxes withheld from their pay for at least 40 calendar quarters during their lifetime are eligible for free coverage.

Part B coverage requires a monthly premium that varies depending on when you become eligible for Medicare. If you have a higher income, the law requires an adjustment to your monthly Medicare Part B. Higher-income beneficiaries pay higher premiums for Part B. This affects less than 5 percent of people with Medicare, so most people don't pay a higher premium.

There are several different options to pay your premium.

1. Social Security Benefit Check Deduction

2. Automatic Checking or Savings Account Deduction

3. Automatic Credit Card Deduction

4. Coupon Book

How It All Adds Up

Medicare is a complex system that has many interlocking parts. By understanding how they all work, however, you'll be in the best position to get everything you're entitled to receive under Medicare. 

For more information on Medicare, visit the government's Medicare website here.