The Original Medicare Plan

Medicare is a federal health insurance program for people of age 65 and older, certain disabled people under age 65 and people of any age with End-Stage Renal Disease (ESRD). The benefits for Original Medicare are administered through the Centers of Medicare and Medicaid Services (CMS).

Original Medicare is divided into various parts and it is important to understand how these parts fit together to provide you coverage. 

Medicare Part A – Hospital Insurance

Medicare Part A benefits for most people at age 65 cost $0. This premium has been pre-funded by you or your spouse working and paying taxes for 10 years (40 quarters). If you don’t automatically qualify for premium-free coverage you can still apply for it, however you will have to pay a premium for the benefits 

Medicare Part A in general will cover:

Medicare Part B – Medical Insurance

Medicare Part B benefits for most people at age 65 costs $144.60. The premium is set by Social Security and it changes from year to year. Americans in higher income brackets will pay more for Part B benefits than those in a lower income bracket. How much you will pay is determined by your adjusted gross income reported to the IRS from 2 years ago. This is known as Medicare’s Income-Related Monthly Adjustment Amount or IRMAA. It can also apply to your Medicare Part D premium as well. 

Medicare Part B is your outpatient medical coverage. Without it you would be uninsured for services like a doctor visit, out-patient surgery, lab work and other preventive services. 

Medicare Part B covers 2 types of services:

How much will Original Medicare cost?

Original Medicare does not cover all of your health care costs. You will have to share the cost of your services by paying premiums, deductibles and coinsurance. 

Medicare Part A Premiums

Most Americans do not pay a monthly premium for Part A benefits through Original Medicare as a result of you or your spouse paying Medicare taxes for 10 years while working. This is also known as “Premium-Free Part A”.

You will automatically get Premium-Free Part A at age 65 if:

    • You are already receiving retirement benefits from Social Security or the Railroad Retirement Board.
    • You’re eligible to receive Social Security or Railroad benefits but have not yet filed for them.
    • You or your spouse had Medicare-covered government employment.

You will get Premium-Free Part A under age 65 if:

    • You have received Social Security or Railroad Retirement Board disability for 24 months.
    • You have End-Stage Renal Disease (ESRD) and meet certain requirements

Medicare Part A Deductible and Coinsurance

Original Medicare measures your use of inpatient hospital and skilled nursing facility services (Part A) as a benefit period. Your Part A benefit period begins the day that you enter a hospital or skilled nursing facility (SNF) and will not end until you have not received inpatient or SNF care for 60 days in a row. 

What will you pay with Original Medicare Part A:

    • $1,408 deductible for each benefit period
    • Days 1-60: $0 coinsurance for each benefit period
    • Days 61-90: $352 coinsurance for each benefit period
    • Days 91 and beyond: $704 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
    • Beyond lifetime reserve days: all costs

Medicare Part B Premiums

Medicare Part B is not automatic for some people and they will need to sign up for Part B. For others, they may automatically be enrolled. If you need to learn how to sign up for Medicare Part B, click here.

If you don’t sign up for Medicare Part B when you’re first eligible, you may have to pay a late enrollment penalty when you do sign up. 

If you have enrolled into Medicare Part B or have been automatically enrolled you will pay a premium each month for benefits. The standard Part B premium amount in 2020 is $144.60. This premium will be automatically deducted from the benefits you receive from one of the following:

If you are not collecting benefits from any of these, you will get a bill to pay your Part B premium.

Medicare Part B Deductible and Coinsurance

Medicare Part B does have an annual deductible that you must pay for the year. In 2020, your Part B deductible is $198. After you have met this deductible, you will typically pay 20% of the Medicare-approved amount for services such as:

    • Most doctor services (even while you’re in a hospital as a patient)
    • Outpatient therapy
    • Durable Medical Equipment (DME)

 

Assistance for low-income Beneficiaries

If you have a low income and limited resources, your state may pay for your Medicare costs, including premiums, deductibles, and coinsurance. Please review detailed guidelines on the government website.

More Information

Up-to date information about Medicare is available at http://www.medicare.gov.

If you have questions about how to enroll in Medicare, call Social Security’s toll-free number, 1-800-772-1213, any business day from 7:00 a.m. to 7:00 p.m. The lines are busiest early in the week and early in the month, so it is best to call at other times. People who are deaf or hard of hearing my call a toll-free TTY number, 1-800-325-0778, between 7:00 a.m and 7:00 p.m. on business days.

When you call, have your Social Security number handy.

These calls are all treated confidentially. Some calls may be monitored by a second customer representative to make sure you are receiving accurate information and courteous service.

If you have any questions about what Medicare covers,
call the Medicare carrier that processes Medicare claims in your area. The name and number are listed in Medicare & You.

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