Medicare
Understanding Original Medicare is the fundamental starting point for every individual navigating their healthcare options as they approach or enter their senior years. While many people hear about Medicare Advantage Plans or Medicare Supplement (Medigap) plans, it’s crucial to first grasp what Original Medicare encompasses, what it covers, and, perhaps more importantly, what it doesn’t. Original Medicare is a federal health insurance program for people 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant) or Amyotrophic Lateral Sclerosis (ALS). It is administered by the Centers for Medicare & Medicaid Services (CMS) and forms the backbone of healthcare for millions of Americans.
Original Medicare is divided into two primary parts: Part A, which covers hospital insurance, and Part B, which covers medical insurance. Medicare Part A (Hospital Insurance) primarily helps cover inpatient care in hospitals, including critical access hospitals and skilled nursing facilities (not custodial or long-term care). It also covers hospice care and some home health care services. For most individuals, Part A is premium-free because they or their spouse paid Medicare taxes through employment for a sufficient number of years (typically 10 years or 40 quarters). If you don’t qualify for premium-free Part A, you may be able to buy it, but the monthly premium can be substantial. Even with premium-free Part A, beneficiaries are still responsible for a deductible for each benefit period (which can reset multiple times in a year if you have separate hospital stays far enough apart). There are also coinsurance costs for extended hospital or skilled nursing facility stays. For example, after a certain number of days in the hospital, daily coinsurance amounts become applicable and can accumulate quickly.
Medicare Part B (Medical Insurance) helps cover medically necessary services and supplies. This includes doctor visits (both in-patient and out-patient), outpatient care, preventive services, durable medical equipment (DME), and some home health care. Unlike Part A, almost everyone pays a monthly premium for Part B. This premium is typically deducted directly from your Social Security benefit. In addition to the premium, Part B has an annual deductible. Once this deductible is met, Medicare generally pays 80% of the Medicare-approved amount for most covered services, and you are responsible for the remaining 20% coinsurance. This 20% coinsurance has no annual limit under Original Medicare, meaning your out-of-pocket costs could theoretically be very high if you have extensive medical needs throughout the year.
The “gaps” in Original Medicare are significant and are often the primary reason beneficiaries seek additional coverage through Medicare Advantage Plans or Medigap policies. Original Medicare does not cover routine dental care (like cleanings, fillings, or dentures), routine vision care (like eyeglasses or eye exams for prescriptions), hearing aids or routine hearing exams, or most prescription drugs used outside of a hospital or skilled nursing facility setting. It also generally does not cover long-term care or custodial care, which can be a major financial concern for many seniors. Without supplemental coverage, these uncovered services and the unlimited 20% coinsurance under Part B can lead to considerable and unpredictable out-of-pocket expenses.
Understanding the intricacies of Original Medicare, including its coverage limitations, deductibles, and coinsurance responsibilities, is the first critical step toward making informed decisions about your overall healthcare strategy. Many people mistakenly believe that once they enroll in Medicare, all their healthcare costs are covered. This misconception can lead to significant financial surprises down the road. Knowing precisely what Parts A and B provide allows you to identify your potential exposure to costs and then strategically choose how to fill those gaps. Whether you decide to combine Original Medicare with a Part D prescription drug plan and a Medigap policy, or opt for a comprehensive Medicare Advantage Plan, a clear understanding of the foundation is paramount.
Duke Marston Insurance Agent specializes in demystifying Original Medicare. We believe that an empowered client is one who fully comprehends the basics. We take the time to walk you through the details of Medicare Part A and Part B, explaining the benefits, costs, and limitations in clear, easy-to-understand language. Our goal is to ensure you have a solid grasp of this foundational program before exploring additional options. By understanding the “why” behind supplemental coverage, you’ll be better equipped to choose the plan that truly aligns with your healthcare needs and financial comfort. Let us help you lay a strong foundation for your Medicare journey. Contact Duke Marston today for a personalized session to explore Original Medicare and how it fits into your overall health insurance strategy.