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Understanding Medicare

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Whether your 65th birthday is on the horizon or decades away, understanding the different parts of Medicare is critical. Here you will find a brief explanation of Medicare Parts A, B, C, and D. Your Telarray advisor can assist you as you make decisions about Medicare and connect you with professionals who specialize in helping navigate the Medicare process.

Parts A and B: Original Medicare

There are two components. Part A covers inpatient hospital care, skilled nursing facility costs, hospice services, lab tests, surgeries, and some home health care services. While very few beneficiaries must pay Part A premiums out of pocket, the annually adjusted standard deductibles still apply.

Many pre-retirees are frequently warned that Medicare will only cover a maximum of 100 days of nursing home care, provided certain conditions are met. Part A is the plan with these provisions. Under the current Part A rules, a beneficiary would pay $0 for days 1–20 of care in a skilled nursing facility (SNF). During days 21–100, a $194.50 daily coinsurance payment may be required.

Knowing the limitations of Part A, some look for alternatives to manage the costs of extended care. Part B covers physicians’ fees, outpatient hospital care, certain home health services, durable medical equipment, and other services that are not covered by Part A.

Part B does come with some costs, however, which are adjusted annually. The premiums vary according to the Medicare recipient’s income level, but the standard monthly premium amount is $170.10 for 2022, and the current yearly deductible is $233. After you meet your deductible for the year, you typically pay 20% of the Medicare-Approved Amount for most doctor services, outpatient therapy, and durable medical equipment.

Part C: Medicare Advantage Plans

Sometimes called Medicare Part C, Medicare Advantage (MA) plans are often viewed as an all-in-one alternative to Original Medicare. MA plans are offered by private companies approved by the federal government. Although these plans come with standardized minimum coverage, the amount of additional protection can drastically differ from one person to the next. This is due to unique provider networks, premiums, copays, coinsurance, and out-of-pocket spending limits. In other words, comparing prices and services offered by different vendors may be the best way to find a Medicare Advantage plan that works for you.

Part D: Prescription Drug Plans

While Medicare Advantage plans often offer prescription drug coverage, insurers also sell federally standardized Medicare Part D plans as a standalone product to those with Medicare Part A and/or Part B. Every Part D plan has its own formulary, or list, of covered medications. Visit Medicare.gov to explore the formulary and prices of approved drugs for your Part D plan, organized by tier.

Medicare.gov is a great place to learn more, and do not hesitate to contact your Telarray advisor if we can help.

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