Understanding Your Medicare Coverage
Although Medicare Advantage has increased in popularity, Original Medicare is still the preferred way to get Medicare benefits for most seniors. As of 2017, 67% of Medicare beneficiaries were covered by Part A and Part B. If you’re weighing your Medicare options, here’s what you should know about Original Medicare.
What is Original Medicare?
The Medicare program was created in 1965 to provide health benefits for seniors. It is managed by the federal government; benefits, premiums, and deductibles are set at the federal level and are essentially the same for everyone covered by the program.
Original Medicare has two parts, Part A, also known as hospital insurance, and Part B, which covers outpatient medical services like doctor visits and diagnostic tests.
Original Medicare is a fee-for-service program, which means you pay for healthcare services as you get them. Unlike network-based Medicare Advantage plans, you can use Original Medicare at any doctor or hospital that accepts Medicare. If you purchase supplemental coverage like Medigap, you can use that at any Medicare provider as well.
What benefits are covered by Original Medicare?
Part A pays for hospitals stays that are deemed medically necessary as well as care in a skilled nursing facility. If you need home health care in the two weeks immediately after a hospital stay, Part A covers that too. Finally, it covers hospice care.
Part B covers most preventive care and most medical services to diagnose and treat illnesses and conditions, including mental illness.
Original Medicare does not cover dental care, routine vision or hearing services, cosmetic procedures, or care outside the U.S. It also doesn’t cover prescription drugs you take at home, except in very rare circumstances, such as oral cancer medications and immunosuppressants after an organ transplant.
How much does Original Medicare cost?
Most people don’t pay a Part A premium; the Part B premium is set by the federal government each year and is usually deducted from your Social Security or Railroad Retirement Benefits check each month.
If you have income above a certain level, you may have to pay a premium adjustment each month directly to Medicare.
There is an annual deductible with both Part A and Part B. After you meet your deductible, Part A pays 100% of covered charges for up to 90 inpatient days for a single illness or injury each year; after that, you pay a daily copayment.
Medicare pays 80% of most covered services under Part B after you meet your annual deductible. There is no copayment or coinsurance for some preventive services.
What is Medicare assignment?
When a doctor or hospital accepts assignment, it means it will accept Medicare reimbursement amounts as payment in full for covered services. Providers who accept assignment bill Medicare first before sending you a bill for the balance.
You can still get care from providers that don’t accept assignment, but you will pay more out of pocket. You can be billed up to 15% more than the Medicare-approved amount for health care services, and the provider may not file a Medicare claim on your behalf.