Making smart decisions about your Medicare coverage should begin with familiarizing yourself with the essential terms you will need to know:
Deductible: An amount of the expenses you need to cover before Medicare kicks in.
Premium: A fee for coverage, usually paid monthly.
Co-pay/Co-insurance: The portion of the cost that you’ll have to cover for each service or drug.
Part A: This insurance helps pay bills for in-patient care at hospitals and skilled nursing facilities, as well as hospice and some home health care services. NOTE: Most people do not have to pay monthly premiums for this coverage since they have paid Medicare taxes while they were working. There is, however; a deductible for hospital stays.
Part B: This insurance helps cover the costs of doctors’ services, lab tests, X-rays, mental health care and other medically necessary services. NOTE: You may delay enrolling in Part B coverage if you or your spouse has employee-sponsored health care, depending on the size of the employer. Make sure you sign up after your employment ends. You may be subject to penalties and will have a waiting period before coverage will kick in.
Part C: This is not additional coverage. Instead, it is an alternative way to get Medicare benefits.
Medicare Advantage is a Medicare-approved plan from private insurers, which cover services included in Parts A and B, which is called “Original” Medicare as well as prescription drug benefits and sometimes dental, vision, and hearing.
Part D: This helps pay for the prescription drugs that you take at home. These are standalone plans through private insurers for people who are getting their Medicare benefits the traditional way — with Parts A and B. You will likely need to pay a monthly premium, an annual deductible, and co-pays.
Medigap: Is a supplement insurance plan for people using original Medicare, which may cover co-pays, deductibles, and other healthcare costs. Medigap plans are labeled by letters and standardized, but they are offered through a variety of private insurers. Your union or employer may already offer you similar coverage, so check before you buy.
Know the difference between Part A and Part B? Here’s information you need to know to make a smart choice about your Medicare coverage.
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