Your guide to Original Medicare
Provided by the federal government, Medicare is low cost health insurance that offers medical coverage for a broad range of services. To be eligible for Medicare, you must be 65 years old or, for those younger than 65, meet certain disability requirements. Individuals of any age diagnosed with Lou Gehrig's disease or who have end-stage renal failure, which requires dialysis or a kidney transplant, are also eligible.
Medicare is available in two forms: Original Medicare and Medicare Advantage. Original Medicare is provided directly by the federal government, whereas Medicare Advantage is a program that allows Medicare recipients to purchase coverage through private health insurance companies.
Benefits of Original Medicare
There are two components to Original Medicare: Medicare Part A and Medicare Part B. Your hospital insurance is provided through Part A. Not only does it cover hospital stays, it also provides benefits for hospice, skilled nursing facilities, blood transfusions and home health care services.
Medicare Part B is your medical insurance; it pays for your doctor office visits, preventive services, outpatient procedures and additional home health care services. Generally, Original Medicare recipients have both Part A and Part B coverage; however, some opt out of Part B if they have another health plan, such as one offered through an employer or former employer.
While not an all-inclusive list, coverage from Original Medicare includes these areas:
- Urgent care and emergency room visits
- Smoking cessation programs
- Physical and occupational therapy
- Medical screenings
Although Original Medicare offers broad coverage, not all medical services are covered. For example, Original Medicare does not cover long-term care costs, routine dental care, cosmetic surgery or hearing aids and fittings.
Costs of Original Medicare
For most people, Medicare Part A is free health insurance--there is no premium because you paid Medicare taxes while you were working. If you did not pay Medicare taxes, you may be charged a monthly premium to buy health insurance through Part A.
Medicare Part B does require all recipients to pay a monthly premium; however, households with annual incomes that exceed $85,000 for a single person or $170,000 for a couple may be charged a higher premium.
In addition to monthly premiums, there are also co-payments, coinsurance and deductibles required by Original Medicare. The out-of-pocket expenses include:
- Deductible for hospital visits and Medicare Part B services
- Co-payments for extended hospital stays beyond 60 days
- Co-payments for stays in skilled nursing facilities beyond 20 days
- Total payment for hospital stays after day 150
- Total payment for skilled nursing facility stays after day 100
- 20 percent of the Medicare-approved amount for most outpatient care and durable medical equipment
- 45 percent of the Medicare-approved amount for outpatient mental health care
Gaps in Original Medicare
The co-payments and deductibles of Original Medicare can become pricey if you end up in the hospital for an extended stay or need ongoing outpatient services. Many seniors close the "gaps" in their Original Medicare by purchasing Medigap supplemental health insurance plans.
Medigap plans are regulated by the government and must offer specific benefits, such as coverage for co-payments, coinsurance and deductibles. These plans are standardized across the country and labeled A-N, so that all plans with the same letter will offer the same level of benefits.
Original Medicare serves millions of seniors and disabled individuals each year. Understanding your medical coverage and preparing for the gaps in Original Medicare benefits can help to prevent unexpected bills and ensure that many of your health care expenses are covered.