Original Medicare can seem like a maze of parts and plans, leaving many beneficiaries confused about what’s covered and how it all works. Understanding the basics of Original Medicare – Part A and Part B – is crucial for making informed healthcare decisions and ensuring you have the coverage you need. This guide will walk you through the core components, costs, and considerations related to Original Medicare, empowering you to navigate your healthcare journey with confidence.

Understanding Original Medicare: Part A (Hospital Insurance)

What Part A Covers

Medicare Part A, often referred to as hospital insurance, helps cover your costs when you’re admitted as an inpatient in a hospital. It doesn’t cover all healthcare costs, but it’s a crucial safety net for unexpected medical events.

• Inpatient Hospital Care: Covers a semi-private room, meals, nursing care, hospital tests and procedures, and other related services during a hospital stay.
• Skilled Nursing Facility (SNF) Care: Provides limited coverage in a skilled nursing facility following a qualifying hospital stay (at least 3 days). The stay must be related to the condition treated in the hospital.
• Hospice Care: Covers hospice services for those with a terminal illness, including medical, emotional, and spiritual support.
• Home Health Care: Covers certain home health services if you’re homebound and need skilled nursing care or therapy services. This might include part-time or intermittent skilled nursing care, physical therapy, occupational therapy, or speech-language pathology.

Part A Costs: Deductibles, Coinsurance, and Premiums

While many people don’t pay a monthly premium for Part A (if they or their spouse worked for at least 10 years (40 quarters) in Medicare-covered employment), there are still out-of-pocket costs to consider.

• Deductible: In 2024, the Part A deductible is $1,600 per benefit period. A benefit period begins the day you’re admitted to a hospital or skilled nursing facility and ends when you haven’t received any inpatient hospital care or skilled nursing care for 60 days in a row.
• Coinsurance:
  • For hospital stays, you typically pay $0 coinsurance for days 1-60 of each benefit period.
  • For days 61-90, you pay $400 coinsurance per day in 2024.
  • For days 91 and beyond (lifetime reserve days), you pay $800 coinsurance per day in 2024 for each “lifetime reserve day” used (you have 60 lifetime reserve days).
  • After you use all your lifetime reserve days, you pay the full cost.
• Skilled Nursing Facility (SNF) Coinsurance: For days 21-100 of a SNF stay, you pay $200 coinsurance per day in 2024. Medicare doesn’t cover the full cost of SNF stays longer than 100 days in a benefit period.

Example: If you’re hospitalized for 75 days in 2024, you’ll pay the $1,600 deductible, $0 coinsurance for days 1-60, and $400 per day for days 61-75. That’s $1,600 + (15 days $400) = $7,600.

Understanding Original Medicare: Part B (Medical Insurance)

What Part B Covers

Medicare Part B is your medical insurance. It covers many outpatient services and doctor visits, helping you manage your healthcare outside of hospital stays. This part of Medicare is incredibly broad in its coverage.

• Doctor’s Services: Covers visits to your primary care physician and specialists, whether it’s for a routine checkup or treatment for an illness.
• Outpatient Care: Covers services you receive without being admitted to a hospital as an inpatient, such as visits to a clinic, emergency room, or outpatient surgery center.
• Preventive Services: Medicare Part B covers many preventive services to help you stay healthy, including annual wellness visits, screenings, and vaccinations. These may be covered at 100% with no deductible or coinsurance if you meet certain criteria. Examples include:
  • Annual Wellness Visits
  • Mammograms
  • Colonoscopies
  • Flu shots
  • Pneumonia shots
• Durable Medical Equipment (DME): Covers medically necessary equipment prescribed by your doctor, such as wheelchairs, walkers, oxygen equipment, and CPAP machines.
• Mental Health Services: Covers outpatient mental health care, including therapy and counseling.
• Some Home Health Services: Covers certain home health services not covered by Part A, such as medical supplies and equipment.

Part B Costs: Premiums, Deductibles, and Coinsurance

Unlike Part A, most people pay a monthly premium for Part B. This premium can vary depending on your income.

• Standard Premium: The standard Part B premium in 2024 is $174.70 per month.
• Income-Related Monthly Adjustment Amount (IRMAA): If your modified adjusted gross income (MAGI) is above a certain threshold, you’ll pay a higher premium.
• Deductible: In 2024, the Part B deductible is $240.
• Coinsurance: After you meet your deductible, you typically pay 20% of the Medicare-approved amount for most Part B services.

Example: You visit a specialist and the Medicare-approved amount for the visit is $200. You’ve already met your $240 deductible. You’ll pay 20% of $200, which is $40. Medicare pays the remaining $160.

What Original Medicare Doesn’t Cover

It’s important to understand what Original Medicare doesn’t* cover. This helps you identify potential coverage gaps and consider supplemental insurance options. Some common exclusions include:

• Most Dental Care: Original Medicare doesn’t cover routine dental care like cleanings, fillings, or dentures.
• Most Vision Care: Original Medicare doesn’t cover routine eye exams, eyeglasses, or contact lenses.
• Hearing Aids and Hearing Exams: Original Medicare typically does not cover hearing aids or routine hearing exams.
• Long-Term Care (Custodial Care): Original Medicare doesn’t cover custodial care, which is assistance with daily living activities like bathing, dressing, and eating. This is typically covered by Medicaid or long-term care insurance.
• Acupuncture: Original Medicare only covers acupuncture for chronic lower back pain.
• Care outside the U.S.: Generally, Original Medicare doesn’t cover healthcare services you receive outside of the United States. There are very limited exceptions.

Supplementing Original Medicare: Medigap and Medicare Advantage

Medigap (Medicare Supplement Insurance)

Medigap policies are private insurance plans that help pay some of the out-of-pocket costs that Original Medicare doesn’t cover, such as deductibles, coinsurance, and copayments. They can be a helpful way to manage healthcare expenses, but they come with a monthly premium.

• Standardized Plans: Medigap plans are standardized, meaning that the benefits are the same regardless of the insurance company offering the plan. This makes it easier to compare plans. (Note: Plans sold to new beneficiaries don’t include Plan C or Plan F.)
• Coverage Gaps: Medigap plans can help cover many of the gaps in Original Medicare, providing more predictable healthcare costs.
• Choosing a Plan: Consider your healthcare needs and budget when choosing a Medigap plan. Some plans offer more comprehensive coverage than others, but they also come with higher premiums.

Medicare Advantage (Medicare Part C)

Medicare Advantage plans are offered by private insurance companies and contract with Medicare to provide your Part A and Part B benefits. Many Medicare Advantage plans also include Part D (prescription drug coverage) and extra benefits, such as dental, vision, and hearing care.

• Network Restrictions: Many Medicare Advantage plans have network restrictions, meaning you may need to see doctors and hospitals within the plan’s network to get coverage.
• Lower Premiums (Potentially): Medicare Advantage plans often have lower monthly premiums than Medigap plans. Some even have $0 premiums.
• Cost-Sharing: Medicare Advantage plans typically have copayments and coinsurance for services. Your out-of-pocket costs can vary depending on the plan and the services you use.
• Prior Authorization and Referrals: Some Medicare Advantage plans require prior authorization for certain services or referrals to see a specialist.

Important Considerations: Choosing between Medigap and Medicare Advantage depends on your individual needs and preferences. Medigap offers more flexibility and predictable costs but comes with higher premiums. Medicare Advantage offers lower premiums and extra benefits but may have network restrictions and require prior authorizations.

Enrollment and Eligibility for Original Medicare

Eligibility Requirements

Generally, you’re eligible for Medicare if you’re a U.S. citizen or have been a legal resident for at least 5 years and meet one of the following criteria:

• You’re 65 or older and you or your spouse has worked for at least 10 years (40 quarters) in Medicare-covered employment.
• You’re under 65 and have received Social Security disability benefits for 24 months.
• You have End-Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS).

Enrollment Periods

Knowing when you can enroll in Medicare is essential to avoid late enrollment penalties.

• Initial Enrollment Period (IEP): This is a 7-month period that includes the 3 months before your 65th birthday, the month of your birthday, and the 3 months after your birthday.
• General Enrollment Period (GEP): If you didn’t enroll in Part B during your IEP, you can enroll during the GEP, which runs from January 1 to March 31 each year. You may have to pay a late enrollment penalty.
• Special Enrollment Period (SEP): You may be eligible for a SEP if you delay enrolling in Part B because you have group health coverage based on current employment. You have 8 months after your employment or the coverage ends (whichever comes first) to enroll in Part B without penalty.

Conclusion

Understanding Original Medicare is a fundamental step in managing your healthcare in retirement. By knowing what Part A and Part B cover, the associated costs, and the potential gaps in coverage, you can make informed decisions about your healthcare options. Whether you choose to stick with Original Medicare or supplement it with a Medigap policy or Medicare Advantage plan, taking the time to understand your options will ensure you have the coverage you need to maintain your health and well-being. Consider your budget, healthcare needs, and risk tolerance when making your decision, and don’t hesitate to seek professional advice from a licensed insurance agent or counselor. Your health is an investment, and understanding your Medicare options is a crucial part of that investment.