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Sound Advice: October 27, 2021

Medicare 101

On July 30, 1965, President Lyndon Johnson signed H.R. 6675, more popularly known as the Medicare law, some 20 years after President Harry Truman called for the creation of a national health insurance fund.  Today, more than 63 million people get health coverage through Medicare, the cost of which runs nearly $1 trillion annually.

Medicare coverage consists of two main parts.  Part A covers inpatient hospital insurance, including charges for the room, meals, and nursing services.  It also covers hospice care and home health care.

Part B is medical insurance for physician’s services, whether as an inpatient or outpatient at a hospital, other health care facility or in a doctor’s office.  Lab tests, physical therapy, and ambulance services are also covered and Part B covers 100% of the cost of preventative services as well as an annual wellness visit.

Part B is optional coverage for which the monthly premium amount ranges from $148.50 to $504.90, depending on income.  For those receiving Social Security benefits, the fee for Plan B is deducted from monthly payments.

There’s also Part C, which is known as Medicare Advantage.  That’s an optional variation, which includes Parts A and B and may also offer services such as vision, dental, and hearing that are not covered by Parts A and B.

The latest addition, Part D, is prescription drug coverage, which began in 2006.  This is optional coverage offered by private companies or insurers that have been approved by Medicare.  These plans vary widely in the range of drugs covered, pricing, and pharmacy availability.

Even with Medicare A and B, there can be substantial out-of-pocket costs.  Those include Part B premiums, deductibles, and copays, prescription drugs (unless you have signed up for Part D), dental care, hearing aids, eyecare, and care in a nursing home or private home.

For services covered by Medicare, the coverage may not be complete.  In cases where the coverage is 80%, the 20% can be covered by a supplemental Medicare insurance policy.

People become eligible for Medicare when they turn 65.  Part A is mandatory once you enroll in Social Security.  Part B may be added later, but premiums may be higher if enrollment is delayed.

A person can also qualify for Medicare before reaching 65 if they have a disability that a doctor can confirm in writing, end-stage renal disease or ALS (Lou Gehrig’s disease). 

Not all doctors accept Medicare.  If you choose a doctor who accepts Medicare, you won’t be charged more than the Medicare-approved amount for covered services.  If you choose a nonparticipating doctor, you’ll have to pay the difference between the fees charged and the Medicare reimbursement. 

For more details, go to medicare.gov. 

N. Russell Wayne, CFP®

Sound Asset Management Inc.

Weston, CT  06883

 203-222-9370

 www.soundasset.com

www.soundasset.blogspot.com 

Any questions?  Please contact me at nrwayne@soundasset.com

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