What is Medicare - MO | MO Life Broker

Medicare

What is Medicare?

Medicare is the federal government-administered health insurance initiative that subsidizes healthcare for those 65 years old or older, under 65 and disabled, and individuals with certain diseases.

How does Medicare work?

Medicare, administered by the Centers for Medicare and Medicaid Services (CMS), delivers coverage to individuals with disabilities, end-stage renal disease (ESRD), and amyotrophic lateral sclerosis (ALS).

The program has four main parts, each with a different purpose.

Medicare Part A

Part A, part of Original Medicare, is inpatient and hospital coverage. It provides healthcare coverage for patients who are admitted for inpatient care in a hospital or clinical facility. It even covers hospice care. If you require blood transfusion services, Part A provides most of the blood. For 2021, the Part A deductible is $1,484 per benefit period. It is possible to have more than one benefit period per year.

Medicare Part B

Part B, also part of Original Medicare, handles things like doctor visits, lab work, diagnostic testing, and care you receive as an outpatient.

Additional services provided under Part B include:

Screening for depression, cancer, and diabetes
Influenza and hepatitis vaccinations
ECGs
Medical equipment

The 2021 monthly premium is $148.50, just a slight increase over 2020. This amount may be greater if your yearly income is beyond $87,000. The annual deductible for Part B is $203.

Medicare Part C

Medicare Part C policies are known as Medicare Advantage Plans. They are private insurance plans that are authorized by Medicare, which improve on the shortcomings in Part A and Part B. Patients who have Part C must have enrolled with Parts A and B. Part C covers the same things as Original Medicare, but can include hearing, vision and dental coverage, and more.

The majority of Medicare Advantage Plans also include Part D prescription drug coverage.

In 2020, the average monthly premium across ALL Advantage Plans was only $36, with many plans at $0 monthly premiums.

Medicare Part D

Part D is prescription drug coverage. While some drugs are covered under part B (like the kind the doctor has to give you in the office), part D prescription drugs are those that you pick up at the drugstore and take at home.

Part D is broken up into four phases:

1) The Deductible Phase – if your drug plan has a deductible, you’re on your own until you have met it. The maximum deductible a plan can have for 2021 is $445.

2) The Initial Phase – after you have met the deductible, your drug plan will begin helping you pay. How much you pay depends mostly on the “Tier” of the drug and which plan you have.

3) The Gap Phase – most people won’t enter the gap, or donut hole, unless their medications are very expensive. You enter the gap when your drug costs reach $4,130 for the year. During this phase, you pay 25% of the retail cost of your drugs.

4) The Catastrophic Coverage Phase – If you are unlucky enough to reach the gap phase and make it through, you ‘exit’ when you have spent a total of $6,550 out of pocket for the year. Then you enter this phase, and the maximum you will spend is 5% of the retail cost of any drug.

Should you have more questions about Medicare, reach out to John Stagner at MO Life Broker by calling 573-247-2391.