2019 B Class Review
Easily Understand Medicare Part A and B
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Even though Medicare, the U.S. national social insurance program, has been in existence since 1966, it can still be rather confusing to fully understand. Here is a look at what exactly Medicare is, the various parts of the program and the cost of Medicare, specifically for Parts A and B.
What Is Medicare?
Medicare is run by the federal agency, Centers for Medicare and Medicaid Services (CMS), previously known as the Health Care Financing Administration (HCFA). It is available to those that are aged 65 and older, younger than 65 but a recipient of Social Security Disability Insurance (SSDI) and those with End-Stage Renal Disease (ESRD).
Premiums paid by current Medicare recipients, contribution from the federal Medicare trust fund, social security and Medicare taxes from individuals all contribute to how this program is currently funded. As each person's situation is different though, the average cost of Medicare Part A and B varies from case to case.
Medicare Part A
In general, Medicare Part A covers hospital insurance. This includes: inpatient hospital care, skilled nursing facility, hospice, lab tests, surgery and home health care. The majority of people don't pay a Part A premium as they or their spouse have already paid in Medicare taxes while employed for a certain amount of time. This is called premium-free Part A. More specifically, those that are 65 or older and meet the following requirements do not have to pay:
- Aged 65 or older and already get retirement benefits from Social Security or the Railroad Retirement Board
- Eligible for Social Security or Railroad Retirement Board but haven't yet filed
- You or your spouse had Medicare-covered government employment
Those under the age of 65 will receive premium-free Part A if they:
- Receive Social Security or Railroad Retirement Board disability benefits for 24 months
- Have ESRD and meet certain requirements
How much is Medicare Part A for those that don't meet the above requirements? As everyone's situation is different, the cost of the premium differs. For example, if you have paid Medicare taxes for less than 30 quarters, you will pay up to $422 a month. Those though that have paid for 30-39 quarters will have a standard premium for $232.
Medicare Part B
Medicare Part B covers the Medical Insurance such as doctor services, outpatient care, durable medical equipment, home health care and some preventive services.
Unlike Part A though, the majority of people will pay a standard premium amount for Part B. The standard cost of Medicare Part B in 2018 is $134 or higher depending on one's income. Those that receive Social Security benefits pay an average of $130 or less.
The standard premium amount though is higher if you:
- are enrolling in Part B for the first time in 2018
- don't receive social security benefits
- aren't directly billed for your Part B premiums
- have Medicare and Medicaid and Medicaid pays your premiums
- have a modified Adjusted Gross Income on your IRS Tax return form two years ago, which is above a certain amount
In general, the cost of Medicare Part B Premium will range anywhere between $134 and $428.60 depending on one's income.
Medicare Part D
Medicare Part D is the prescription drug plan which is also known as Medicare prescription drug benefit. Each month, individuals pay for this on top of Medicare Part B. The cost of it is based on one's income, therefore, those above a certain income will pay a related adjustment amount on top of the plan premium. Those that had a filing status of an individual with an income in 2016 of $85,000 or less will only pay the plan premium. Someone that is filing individually with an annual income of over $160,000 will pay $74.80 a month in addition to the premium. The price will also depend on the drugs used, the plan that is chosen, which pharmacy you use and many other factors. There are various prescription drug plans such as Express Scripts, which Medicare Part D covers and are easy to join.
Cancelling Medicare
Once people reach the age of 65, they are automatically enrolled in the program which does not suit everyone's needs. It is important to know how to cancel Medicare Part B if you are in this situation.
Unfortunately, it is not as easy as simply filling out a form online and this is intentional as there is a penalty if you cancel and then later want to re-enroll. To cancel, schedule an appointment with an officer at your nearest Social Security Office who will then go over Form CMS 1763.
Once you have withdrawn from the program, it will become effective at the end of the month from when you filed the request form. Cancelling Part D can be done during the Open Enrollment Period which is between October 15 and December 7 by calling 1-800-MEDICARE and requesting to be disenrolled.
Source: https://www.life123.com/article/easily-understand-medicare-part-a-and-b?utm_content=params%3Ao%3D740009%26ad%3DdirN%26qo%3DserpIndex
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