Medicare Explained

At Almond Insurance, I know the importance of understanding what you’re signing up for. Here is an overview of the parts, costs, and enrollment of Medicare.

The Parts of Medicare

Original Medicare is made of Part A and Part B. Then there’s Medicare Advantage, Prescription Drug Plans, and Medicare Supplements.

  • Medicare Part A is your hospital insurance, covering inpatient care in a hospital or skilled nursing facility, as well as hospice care and home health care.
  • Medicare Part B is your medical insurance, covering preventive and medically necessary care including mental health, ambulance services, clinical research, durable medical equipment, and more.
  • Medicare Advantage plans are combination plans to get your Medicare coverage from a private insurance company. You get the same Part A and Part B coverage and often can purchase additional benefits including prescription drug coverage, dental, vision, or hearing care.
  • Part D Prescription Drug Plans cover your prescriptions for set copayments at the pharmacy. Your costs depend on whether your drug is generic, brand-name, non-preferred, or specialty. At least two drugs in each of the most commonly prescribed categories are covered.

Then, there are Medicare Supplement Plans, which help pay for your out-of-pocket expenses from Medicare Part A and Part B. They help pay for your Part A and B coinsurance, copayments, and deductibles and some plans can cover foreign travel emergency care.

find the best plan

The Costs of Medicare

With Medicare, you will be paying premiums, deductibles, copayments, and coinsurance.

Premiums

You will pay premiums for each of your plans. Many people receive Part A without paying premiums because they qualify with a disability or have worked long enough while paying taxes to Medicare.

Part A premiums are $471 in 2021 for people who worked fewer than 30 calendar quarters paying taxes to Medicare. People with 30-39 calendar quarters of work credits pay $259 each month in 2021.

Every person with Medicare pays a Part B premium. The standard premium for Part B is $148.50 in 2021. If your income falls in a higher tax bracket, you may owe an additional charge called an Income Related Monthly Adjustment Amount (IRMAA) which raises your premiums.

If you enroll past your sign-up period, you may have to pay a late enrollment penalty. The Part B late enrollment fee adds 10% to your premium for every 12 months you went without signing up after you became eligible.

Part D may also come with a late enrollment penalty if you do not have creditable drug coverage when you become eligible for Medicare. You could be penalized for every month you are not enrolled in a Part D plan or do not have creditable prescription drug coverage. It’s also important to note that if you were to receive a late enrollment penalty for Part D, this penalty cannot be paid off as it is permanent.

Deductibles

You pay a Part A deductible for each benefit period. A benefit period begins when you are admitted as an inpatient in a hospital or skilled nursing facility and ends when you have not received inpatient care for 60 days. The 2021 Part A deductible is $1,484 for each benefit period.

You pay the Part B deductible yearly. The 2021 Part B deductible is $203.

Copayments/Coinsurance

Once you meet your Part B deductible for the year, you will typically pay 20% of the Medicare-approved amount for covered services. This includes most doctor services, outpatient therapy, and durable medical equipment.

Enrolling in Medicare

You enroll in Medicare through Social Security. If you missed your Initial Enrollment Period, you can enroll during the Open Enrollment Period, which begins on January 1 and ends March 31.

There are also set times during the year when you can make changes to your plan, such as the Annual Enrollment Period in the fall, which is from October 15 through December 7.

If you are located in the Northern Illinois area, I am ready to serve and help you. I’m just a phone call away for all your Medicare needs!