Original Medicare: A Comprehensive Guide

Healthcare can be overwhelming, especially when it comes to understanding insurance options. One of the most foundational programs in the U.S. is Original Medicare. Whether you’re approaching retirement or helping a loved one, this guide will demystify Original Medicare and how it works.

What is Original Medicare?

Original Medicare is a federal health insurance program primarily designed for people aged 65 and older, though it also covers some younger individuals with disabilities or specific medical conditions. It consists of two main parts:

 Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care.

Part B (Medical Insurance): Covers outpatient care, doctor visits, preventive services, and some other health-related services such as durable medical equipment (DME) and medical treatments like chemotherapy and dialysis.

How Does Original Medicare Work?

Enrollment

You can enroll in Original Medicare during specific periods:

1. Initial Enrollment Period: This lasts for seven months, starting three months before your 65th birthday, including the month you turn 65 and ending three months after.
2. General Enrollment Period: If you miss your initial period, you can enroll from January 1 to March 31 each year, with coverage starting on the first day of the next month after you’ve applied.
3. Special Enrollment Period: If you’re still working and have employer-sponsored health insurance, you can sign up for Medicare without penalty when your coverage ends.

Costs

• Premiums: Most people don’t pay a premium for Part A if they’ve paid Medicare taxes for at least 40 quarters. Part B requires a monthly premium, which is income-based. Lower income individuals can qualify for their premium to be paid through a third party, usually with state Medicaid eligibility. Higher income individuals can pay more based on the income shown on their two year previous tax return.
• Deductibles and Coinsurance: There are deductibles for both Parts A and B, and after you meet your deductible, you generally pay 20% of the Medicare-approved amount for most doctor services, while Medicare covers the remaining 80%.

Coverage Limitations

While Original Medicare covers many services, it doesn’t cover everything:

• Prescription Drugs: Original Medicare doesn’t include coverage for most prescription medications. However, you can enroll in a separate Medicare Part D plan for this coverage.
• Routine Dental and Vision Care: Most dental and vision services are not covered, so consider supplemental insurance if you anticipate needing these services.
• Hearing Aids: Original Medicare does not cover hearing aids or exams for fitting them.

Benefits of Original Medicare

1. Flexibility: You can choose any doctor or hospital that accepts Medicare, giving you a wide range of options.
2. No Network Restrictions: Unlike many Medicare Advantage plans, Original Medicare does not require you to use a network of providers.
3. Nationwide Coverage: Medicare is accepted by providers across the country, making it easier to receive care while traveling.

How to Enhance Your Coverage

Given the gaps in coverage, many people opt to add supplemental insurance to Original Medicare:

• Medigap Plans: These are private insurance policies that help cover out-of-pocket costs like copayments, coinsurance, and deductibles. Each Medigap plan offers different levels of coverage, so it’s crucial to compare options.
• Part D Plans: As mentioned, for prescription drug coverage, you can enroll in a standalone Medicare Part D plan. These plans vary widely in cost and coverage, so reviewing your medications and plan options is essential.

An Important Note

Medicare offers comprehensive coverage on your typical medical needs as it relates to hospitalizations and medical care. However, one very important key to Original Medicare is there is no max out of pocket limit to the 20% coinsurance you are responsible for paying. Your 20% is quite literally unlimited, which could result in financial devastation. Medicare is a great foundation for your healthcare but must be built on to provide the most comprehensive coverage and financial protection.

If you’re nearing the age of 65 or helping someone who is, take the time to familiarize yourself with Original Medicare and consider how it fits into your overall healthcare strategy. Speaking with a licensed independent insurance advisor can give you the confidence you need to find the right coverage for you or your loved one.