Medicare Learning Center 

Medicare Basics: 

Quick note…

If you’re on an employer plan, please talk to your benefits administrator before disenrolling or enrolling in anything.

Key Words:

1. What is Medicare? 

• Medicare is the federal health program for people 65 and older, people under 65 on disability for two years, and people with End-Stage Renal Disease. It is managed by the Center for Medicare and Medicaid Services. Original Medicare includes Part A hospital coverage (for inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care) and Part B medical coverage (for certain doctor services, outpatient care, medical supplies, and preventive services). You will have to share some of the Part A and Part B costs in the form of Deductibles, Co-pays ($) or Co-insurances (%), and Premiums. Neither Part A or Part B offer a Max-out-of—Pocket Limit, which means there’s no limit to how large your share of the costs could become. The lack of a Max-out-of-Pocket limit is what we call, a gap in the coverage. 

• One way to protect yourself and fill that gap is through a Medigap plan. Medigap Supplement plan benefits are designed by the state and are offered by private insurance companies. Each plan helps cover certain gaps in Part A & Part B and they would pay out second to Medicare parts A & B. Medigap plans do not include prescription drug coverage. 

• Prescription coverage can be purchased separately through a “Stand Alone” Part D Prescription Drug Plan, or through a Part C Medicare Advantage Plan that includes drug coverage. 

• Part C Medicare Advantage Plans are offered by private insurance companies who are contracted by Medicare to manage the Part A, Part B and Part D benefits in one packaged plan. These plans must include Max-out-of Pocket limits for their members.

• Throughout each year there are specific time periods when you are allowed to reevaluate your Medigap Supplement, Part D, and Medicare Advantage plan options, and change or drop your plan(s).

2. What is Part A Hospital Coverage?

Part A covers inpatient hospital stays, skilled nursing facilities, home health care, & hospice. Part A is available for no monthly premium to people and their spouses who worked at least 10 years (paying taxes for 40 quarters). There are still some shared costs for the areas that Part A covers like a per-occurrence inpatient deductible. 

3. What is Part B Medical Coverage?

Part B covers professional medical services that are approved by Medicare. Unless you’re receiving certain financial help, you’ll have a Part B monthly premium. This amount is based on your income and is drawn from your social security monthly. If you’re not taking out social security yet, you’ll be billed quarterly. Part B has an annual deductible that you have to pay before Part B helps pick up a percentage of your medical costs. Once you meet your deductible, then Part B will pay for 80% of your “medicare approved costs”, and you would be responsible for the remaining 20% co-insurance for the rest of the calendar year. Some of the part B professional medical services include, doctors and specialists office visits, ER, outpatient surgery, durable medical equipment, ambulance, labs, and more. 

4. What is a Part D Prescription Drug Plan? 

People on Medicare are eligible to enroll in a standalone Part D drug plan in addition to their Original Medicare benefits, or they can join a Part D drug plan that is built-in to a Part C Medicare Advantage plan. Part D is the insurance that covers your pharmaceutical drugs. You pay a premium to the insurance company that you choose for your Part D plan. They will have a network of pharmacies where you can pick up your prescriptions for a certain discounted co-pay or percentage of the full cost. The insurance company pays the remaining amount of your prescription costs. To find a suitable Part D drug plan, you need to make sure the insurance company you choose covers the prescriptions you need, and works with the pharmacy you need. These types of factors can make selecting a suitable Part D plan feel overwhelming. As independent agents at Springwater Insurance Group, we help you quickly compare all plans that fit your needs and budget. Part D is optional, however if you do not join a Part D plan once you become eligible for one, and then decide to join one later in life, you may be penalized for the time you spent without one. To learn more about Part D, please contact us and speak to a licensed independent agent who can answer all of your Medicare questions. 

5. What is a Part C Medicare Advantage Plan?

• Part C is Medicare Advantage. Medicare Advantage plans are managed by private insurance companies who are contracted to manage your Medicare benefits, instead of being managed by the government (Center for Medicare and Medicaid Services). They become your primary coverage. These plans must, at a minimum, provide all of your Part A and Part B benefits to you, but they can also offer more coverage than Original Medicare, additional perks, and the option of a built in Part D drug plan. These Medicare private insurance plans usually have an HMO or PPO network of doctors, but cover your emergency care world wide. You must continue to pay your Medicare Part B premium while enrolled in an Advantage plan and be enrolled in both Medicare Parts A and B and be a resident in the plan’s service area. To learn about how these plans help cover your Medicare costs, please contact us and speak to a licensed independent agent who can help you compare options and teach you how a Medicare Advantage plan may save you money. 

4. What is a Medigap Supplement Plan?

A Medigap Supplement Plan is extra, secondary, health insurance that you buy from a private company to pay health care costs not covered by Original Medicare Parts A & B, such as co-payments, deductibles, and health care if you travel outside the U.S. There are around 10 Medigap plans to choose from and their benefits are designed by the state. These plans have premiums and the higher the monthly premium, the less Part A & Part B costs you have to share. A plan G, for example has a higher monthly premium, and asks you to pay the Part B deductible, but then the plan G pays 100% of your Part A costs and 100% of your Part B costs. The lower the premiums, typically the more out of pocket costs you'll have. A plan K, for example has a lower monthly premium, and asks you to share a larger co-insurance percentage, but because you have out of pocket costs with the plan K, the plan K protects you with a Max-out-of-Pocket limit. Medigap plans allow you to see any provider in the U.S. as long as they accept Medicare. Medigap plans do not include Part D drug coverage, their only purpose is to help fill the gaps in Original Medicare Parts A (hospital) & B (medical). 

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