What is Medicare and Why One Plan Doesn’t Fit All?

Most people have a basic understanding of what Medicare is and how it works. It’s a health insurance program designed for senior citizens 65 and older, as well as certain individuals with disabilities that are younger than 65. 

What is Medicare?

Medicare is a US health insurance program and service that mostly applies to people who are 65 years of age or older, though there are extensions available for certain disabled individuals or those who are in the end-stage of renal failure and have to have dialysis.

Different Medicare Plans

Medicare comes in several plans, namely Medicare Part A, Medicare Part B, and Medicare Part D. Additionally, there are several other smaller or supplemental plans that fit into Medicare’s coverage.

• Medicare Part A cover’s inpatient hospital stays, temporary nursing home care, and some home health or hospice care.
• Medicare Part B cover’s medical services from doctor’s appointment, health care provider, and other healthcare facilities, medical equipment, and preventive care.
• Medigap is a supplemental policy that helps cover out-of-pocket expenses like co-payments and deductibles.
• Medicare Advantage Plan includes Part A and B coverage as well as vision, hearing, and dental in a single plan, sometimes offered by a private insurance company.
• Medicare Part D helps cover the cost of prescription drug coverage.

It’s important to shop around for Medicare-related plans excluding Part A and Part B. Supplemental and Advantage plans are available in various areas, but it’s difficult to guarantee that they’ll be available everywhere. Some locations do not offer certain plans, so if an individual wants to make the most of their coverage, it’s a good idea to shop around in order to award themselves the best possible savings.

Medicare Costs

Depending on the plan that a person has, costs of maintaining Medicare policies vary. Additionally, costs can vary depending on the insured individual’s income in some cases. Because each case can differ from the next, the estimated costs are averages that most individuals can expect to pay for coverage.

Costs for Medicare Part A and Part B

For Medicare Part A, coverage costs vary from premium-free to several hundred dollars a month. In many cases, individuals do not pay premiums for Medicare Part A unless they have purchased the plan independently. In this case, they can expect to pay between $252 and $458 in premiums. The deductible for hospital stays is roughly $1,400 and, depending on the length of the stay, additional charges can be accrued.

Medicare Part D Late Penalties

In addition to the costs of coverage, Medicare Part D also charges covered individuals penalties if they enroll later than the open enrollment period. These penalties typically equal 1% of the National Base Beneficiary Premium for each month of non-coverage. In 2020, this sum will be just under $33. The penalty is rounded up to the nearest $0.10 and added to the monthly premium costs.

When and How to Enroll

An individual becomes eligible for Medicare around the time they turn 65. The enrollment period begins three months before the individual’s 65th birthday, includes the individual’s birth month, and ends three months afterward. This means that there is a seven-month enrollment period that an individual has to apply for Medicare benefits without incurring late penalties. 

Low-Income Subsidies

Some people who are on the lower end of the income spectrum can qualify for subsidies to help cover their Medicare Part D expenses. Typically, people who qualify for help are enrolled in Medicaid and Medicare at the same time, receive SSI benefits, or already qualify for the Medicare Savings Program. Applying for assistance could help low-income individuals manage their coverage costs and save money on their monthly premiums.