Part A is provided by Social Security and covers HOSPITALIZATION. The deductible is $1,288 and most people do no pay a monthly premium.
Part B is also provided by Social Security and covers DOCTOR VISITS at 80%. In 2016 the Part B premium increased to $121.80/month. Most people have the premium deducted from their Social Security. The deductible for Part B is $166. As a side note, Part B premium is based on income. If your income is greater than $85,000 for an individual or $170,000 for those that file a joint return, you will pay a higher premium.
WHAT DOES THIS MEAN??? If you have only original Medicare, you will pay 100% of your doctor visits and hospital visits until you reach your deductible. Once you meet the deductible (i.e. $166 for doctor visits) Medicare will start paying 80% of the bill. You are still responsible for the remaining 20%.
It is important to note that not all doctors accept Medicare. You will need to confirm with your doctor that they accept Medicare before making your appointment.
HOW TO FILL THE GAPS??? Many people purchase a Medicare Supplement plan to fill the gaps. The most common plans are Plan F or Plan G. These plans cover the Part A deductible, Part B co-insurance (20%), and in some cased Part B deductible. Medicare Supplements are provided by private insurers (i.e. BCBS, United Healthcare/AARP, Mutual of Omaha, etc.) and charge a monthly premium. The premium will vary by age, carrier, and zip code.
WHAT ABOUT PRESCRIPTION DRUGS??? For those that are Medicare eligible, you are REQUIRED to purchase a prescription drug plan if you do not have credible coverage. Prescription drug plans are provided by private insurers (i.e. BCBS, Humana, United Healthcare/AARP, etc.), NOT Social Security. Many people think prescription drugs are included in Part A and Part B…they are NOT. If you choose not to purchase a plan, you will be penalized 1% of the average premium for each month that you do not have coverage (roughly $.03/month). Although this figure sounds low, it does add up over time. The penalty is NEVER removed. Once you are assessed a penalty it will be added to your monthly premium (i.e. $30/month premium + $20 penalty = $50 monthly premium).
Prescription Drug plans are subject to an enrollment period. The enrollment period is October 15th-December 7th. If you qualify for a special election period (i.e. aging in to Medicare or losing credible coverage) you will be eligible for enrollment based on the date of your eligibility.
Prescription Drug plans have a monthly premium, co-pays are charged based on which Tier your drug falls in to, and some plans charge a deductible. It is important to review your drug list before switching carriers.
WHO IS ELIGIBLE FOR MEDICARE??? People that are 65 or older or those that have been disabled and collecting social security disability for 24 months.