The Quick Medicare Guide For 2021

Medicare Guide 2021

One of the most complicated decisions you need to make after you turn 65 or retire concerns your healthcare coverage. Starting Medicare involves a series of decisions about what type of coverage you want. 

We’ve put together this quick Medicare guide to help make this process as easy as possible.

Understanding Medicare

Medicare is a federal health insurance program administered through an agency called the Centers for Medicare and Medicaid Services (CMS).

It is only available to certain individuals, including:

  • People who are 65+
  • People under age 65 with certain disabilities
  • People with End-Stage Renal Disease (ESRD)

While that explanation sounds simple enough, there is a lot more to understand. Let’s start with the parts that make up Medicare coverage.

Different Parts of Medicare Coverage

There are three main parts that make up the Medicare program. Each part covers different aspects of your healthcare needs. 

Medicare Part A

Medicare Part A is “hospital insurance”, and it covers inpatient hospital care. Inpatient care refers to any illness, procedure, or treatment that requires admission to the hospital. For instance, if you have knee replacement surgery and then stay in the hospital for a few days, that would be considered inpatient care.

What else is covered under Medicare Part A:

  • Semi-private room
  • General nursing care
  • Drugs, supplies & equipment used during inpatient treatment
  • Meals in the hospital
  • Special care units (ICU, CCU)
  • Other hospital services & supplies
  • Lab tests & X-rays
  • Operating room & Recovery room
  • Rehabilitation services in the hospital
  • Some blood transfusions
  • Skilled nursing facility care (part-time basis)
  • Home health-care services (short-term basis)
  • Hospice care

Medicare Part A does not pay for most regular medical services, emergency/urgent care, rehabilitation therapy, or skilled nursing facilities long-term. 

Medicare Part B 

Medicare Part B is “medical insurance” and it covers doctors’ services, outpatient care, medical supplies, and preventive services.

It includes two basic types of services:

Medically necessary services – This includes services needed to diagnose and treat a medical condition (outside of a hospital stay). 

Preventive services – This refers to anything that is designed to prevent illness, such as the flu or pneumonia shot. It also covers diagnostic screenings, such as breast or prostate cancer screenings. 

Medicare Part B also covers:

  • Clinical research
  • Ambulance services
  • Durable medical equipment
  • Mental health services
  • Urgent/Emergency services

Together, Medicare Parts A and B are known as “Original Medicare”. Many people who are applying to Medicare sign up for both parts, but you are not required to do so.  

You may be able to get Original Medicare for free. It mostly depends on how much you paid in Medicare taxes while you were working. Otherwise, you might have to pay a monthly premium. 

Medicare Part D

Now things get a little more complicated. Original Medicare does not cover most prescription medications. That’s where Medicare Part D comes in. It helps pay for your medications and vaccinations.

You can enroll in a Medicare drug plan, which adds prescription coverage to Original Medicare. In order to get this coverage, you must be enrolled in Medicare Parts A and/or B. You can also enroll in a Medicare Advantage plan (Medicare Part C) or some other sort of Medicare coverage that includes prescription drugs.

There is also something called Medigap Insurance, which is similar to a Medicare Advantage plan. The main difference between the two is that Medigap does not offer prescription drug coverage.

Understanding Medicare Advantage Plans

Medicare Advantage plans are sort of a “one-stop-shop” option for your healthcare needs. They are not part of a federal program but are instead sold through private companies that contract with Medicare to provide medical services. 

They include everything covered under Original Medicare, as well as prescription drug coverage. Many plans also include enhanced services that Medicare doesn’t cover, such as vision, hearing, dental, and transportation services.

You do have to pay a monthly premium and copayments for most services, but the amount will depend on your plan, where you live, and many other factors.

Different Kinds of Medicare Advantage Plans

Just when you thought things couldn’t get any more complicated…they do.

There are several different kinds of Medicare Advantage plans:

  • Health Maintenance Organization (HMO) plans
  • Preferred Provider Organization (PPO) plans
  • Private Fee-for-Service (PFFS) plans