Medicare Basics

Understanding Medicare is like most things, the details can be complex and confusing. Once you see the big picture the details are easier to grasp. And, as always, if you have any questions, please call us at (877) 402-9845.

Medicare has 4 primary components:

Medicare Part A — Hospital
Medicare Part B — Medical Insurance
Medicare Part C — Medicare Advantage
Medicare Part D — Prescription Drug Benefits

Medicare Part A: Hospital Insurance

Medicare Part A pays for the services that hospitals provide, such as the room, nursing services, and supplies for an inpatient stay. In some cases, Part A may pay for a stay in a skilled nursing facility, as well as home health and hospice care. Fortunately, most people do not have to pay a monthly premium for Part A coverage. It is funded by a portion of the Social Security tax you and your employers have already paid.

Part A, however, will not cover all your hospital costs. There is a deductible of $1,024 per benefit period for 2008. You must pay your entire deductible before Medicare Part A will cover any hospital expenses. In addition, if you are hospialized for an extended period, you will also have to pay a daily coinsurance fee. This is $256 per day for days 61 - 90, and it rises to $512 a day for your 91^st day through 150^th day.

These costs can build up. If you are hospitalized for 60 days, you’ll only be responsible for your Part A deductible. But if you are hospitalized for 100 days, you’ll pay almost $10,664.

Medicare Part B: Medical Insurance

Medicare Part B pays for the services that doctors provide, in the hospital or in their offices . It also pays for outpatient hospital services, long-lasting medical equipment like wheelchairs and walkers, and other medical services and supplies. Part B is optional. If you decide to enroll in Medicare Part B, you may also apply for a supplemental plan of your choice without answering health questions.

Part B works like most health insurance plans. You pay a monthly premium which is based on your income, that you can even have deducted from your Social Security check. For 2008, you must meet an annual deductible of $135.00. After that, Medicare generally pays 80% of the charges it approves. You typically are responsible for paying the remaining 20% or applicable co-payment, plus any charges that are higher than Medicare’s approved amounts if the provider does not accept Medicare assignment.

Medicare Supplement or “Medi-Gap” plans pay for many health care services and supplies, but it doesn’t pay all of your health care costs. These costs are called “gaps” in Medicare coverage. A Medicare Supplement or “Medi-Gap” policy is designed to help cover these gaps. You pay a monthly premium for this additional coverage.

Finding the right plan for you

Medicare Part C: Medicare Advantage

Certain private insurance companies offer Medicare Advantage plans, also referred to as Medicare Part C. Medicare Advantage plans have a contract with Medicare that allows them to administer your Medicare benefits (Part A and Part B), so you have one source for your health care coverage. These plans may also provide enhanced benefits that go beyond those required by Medicare. To help you save more on the cost of your coverage, certain Medicare Advantage plans use provider networks (health maintenance organizations and preferred provider organizations) to reduce your share of the cost for covered services.

Medicare Part D: Prescription Drug

Anyone who is entitled to Medicare Part A or enrolled in Part B will be able to enroll in Medicare Prescription Drug coverage. Here’s how it works: The Centers for Medicare and Medicaid Services (CMS) have chosen a variety of private companies to offer Medicare Prescription Drug Plans (PDPs). Premiums and benefits may vary, based on your geographic region and on the company. However, average premiums are about $32 per month. This premium may be lower for those with limited income and resources. When Medicare designed its standard prescription drug benefit, it focused on providing solid coverage to the majority of people with Medicare. PDPs may offer Medicare’s standard benefit or plans with enhanced benefits.

Anthem Blue Cross and Blue Shield Medicare Part D plans can help you save money while meeting your prescription drug needs. To learn more about Medicare Part D basics and our plans, please click on the link below.

Finding the right plan for you