How a Medicare Supplement Coordinates with Parts of Medicare
August 9, 2021
Parts of Medicare
Medicare seems like the Alphabet soup of health insurance. Parts A, B, C, D and then the myriad of supplemental coverage. As Charlie Brown would say, “Good Grief”…. Let’s decipher it here.
Part A – Part A of Medicare covers inpatient hospital care, skilled nursing care (not Long-Term Care or custodial but medically necessary care after an inpatient hospital stay) and general Hospice CARE. All are covered by Medicare Part A. If a consumer had NO additional coverage, there would be some cost sharing for these services. If an individual has worked 40 quarters or not worked outside the home but a spouse did, they qualify to receive Part A, paying no premium.
Part B – Part B of Medicare covers medical expenses such as doctors’ office visits, outpatient surgery/therapies, durable medical equipment, x-rays and labs and the emergency room. This part of Medicare is required to Opt-In either at Initial Enrollment Period, – the timeframe to enroll that begins 3 months before 65th birth month or a Special Enrollment Period which is a chosen date like a retirement date from employment. Once elected there is a timeframe for enrollment in supplemental coverage.
Medicare Supplement/Medigap Plan – Medicare supplement or Medigap plans fill in the ‘gaps’ of costs that Medicare does not cover. For example, above I mentioned that within Part A, Medicare covers hospital expenses. In 2021, Medicare pays all inpatient hospital expenses EXCEPT $1,484. This would be the costs that Medicare Supplement would cover in full. Medicare supplements have a monthly premium, so they are typically known as the traditional coverage. There are no medical questions for the initial enrollment, i.e., aging in or coming off employer coverage.
Part D – I know I am not going in order of the alphabet, but Part D (prescription drug coverage) coordinates with Medicare Supplement/Medicap policies, because they do not have retail prescription drug coverage. In 2021, there are 28 plans available from multiple carriers for prescription drug coverage. It is important to have daily medications and the pharmacy of choice when enrolling, so we can look at the carriers and plans to find which one best fits you.
If you are looking at a budget for Medicare with a Supplement and prescription drug plan design, I would start with $300 a month for the Part B premium to the government, Medicare supplement premium and drug plan premium. This does NOT take into consideration any income related increase payment to the government.