Original Medicare

Hospital & Doctors Coverage

Original Medicare (Hospital and Medical Coverage)

Medicare is a federal entitlement program that was first created in 1965 to provide national health insurance coverage for those that were 65 and over regardless of their income and medical history.

When Medicare first began, only two parts existed – Part A for hospital services that was free and carried a small annual deductible, and Part B for medical services that charged a small monthly premium. The very first Medicare customers paid a $40 annual deductible for Part A (Hospital) and a $3 per month premium for Part B (Medical).

As of 2021, those costs are now:

$1,484 for the Part A (Hospital) deductible.
$148.50 per month or higher depending on your income for Part B (Medical).

Medicare Part A- Hospital Coverage

PART A covers inpatient hospitalization. Think of this as the room and board when someone is admitted into the hospital.

Part A covers:

Inpatient hospital
Skilled nursing facility
Home health care.
Hospice care

Medicare Part B- Medical Coverage

PART B covers outpatient medical services. Part B covers almost everything medically necessary outside of the hospital.

Part B covers:

Doctor visits which include both primary and specialist
Preventative care
Outpatient surgeries
Durable medical equipment
Expensive treatments like chemotherapy
Ambulance rides.

Medicare Part D- Prescription Coverage

PART D covers prescription drug coverage. The Part D plans are provided by private insurance companies that are approved by Medicare to help with the costs of prescription drugs.

Part D covers:

Oral Medication
Insulin
Shingles Vaccine

Understand Medicare Premiums

Many people think that Original Medicare is free, but in fact, you will probably pay a monthly premium for your coverage. The good news is that Part A (Hospital) is free for most people since they paid into it through payroll taxes.
Most people will pay a standard monthly premium for Medicare Part B, which is $148.50 for 2021. However, some will pay more if their income is above a certain amount.

If you enroll in a Part C Medicare Advantage plan, you will still pay your Part B premium. You may also pay your insurance company an additional premium amount, depending on the plan you choose.
The Part D (Drug) premiums vary depending on your insurance company and your plan’s benefits. However, if your income is above a certain level, you will also pay an additional premium.”

Original Medicare Benefits and Out of Pocket Costs 2021

Before deciding on additional coverage options, you need to know what you will pay as well as where your benefits start and end.

Part A is sometimes called “premium free Part A” because most have paid it through their payroll taxes. If someone did not work the required amount of years (10) or quarters (40), here is what Medicare Part A would cost them in 2021:

Medicare taxes for less than 30 quarters, the standard Part A premium is $471 a month.
Medicare taxes for 30-39 quarters, the standard Part A premium is $259 a month.

There is a deductible under Part A, which is $1,484 in 2021, that will cover you for a 60-day benefit period. This deductible could be required multiple times throughout the year, depending on hospital admittance. Also, you must pay a coinsurance of a few hundred dollars a day after your 60th consecutive day in the hospital. At some point after the 90th day, coverage runs out, and you must pay all costs out of pocket.

Part B has a standard monthly premium of $148.50 for 2021. There is a deductible under Part B for medical expenses, which are $203 a year for 2021. After that is met, Medicare Part B pays 80 percent of your medical costs, and you would be responsible for the other 20 percent. Unfortunately, Medicare Part B does not have a max out-of-pocket cap.

Part D standalone plan premiums vary but, on average, expect to pay about $20 a month. The Part D prescription plans have out-of-pocket costs that vary, depending on the plan and the cost of the medication you take.

Know Your Medicare Supplemental (Medigap) Coverage Options

By now, you can see that Original Medicare Part A and B will not cover all your health care costs. However, supplement plans, also known as Medigap, can take care of things that Original Medicare Part A and B do not pay.

Medigap can offer coverage for things like deductibles, co-pays, and coinsurance.

Supplement plans are available if you are enrolled in Medicare Parts A and B. You cannot enroll in a Medigap if you have a Medicare Advantage plan.

There are 10 standardized Medigap plans, labeled Plan A through N. The two most popular plans are Plan G and N.

Medigap plans are offered by private insurance companies approved by Medicare. The plans are standardized by alphabet letters and must offer the same coverage and benefits; however, different companies may charge different premiums for the same coverage.

If you enroll into a Medigap during the six-month Open Enrollment Period (OEP) window, you will be guaranteed coverage typically at the best premium.

If you enroll later or decide to change plans, coverage can be underwritten; this means you are subjected to denial or higher premiums because of preexisting conditions.

For more information on any of the plans listed above, please call the number above. If you are shopping for rates in your area, you can request a no-obligation quote so you can compare the rates side by side with the top carriers.