What the heck is Medicare?
How does it work?
What are my responsibilities?
What is A, B, C, and D?
What does Joe Namath have to do with it?
If you watch the television and see all the commercials OR if you are about to turn 65 and are getting tons and tons of mail OR if you have a phone and are getting slammed with calls about Medicare and insurance plans you are probably like most people - either a little or a lot confused! So consider this your Medicare 101 crash course (that we will keep very simple)
MEDICARE IS NOTHING MORE OR LESS THAN AN 80/20 INSURANCE PLAN
Now a disclaimer: I am about to lay some numbers on you that might cause you consternation, constipation, or cardiac issues if you stop reading. These numbers would be concerning if you lived in the late part of the 20th century but we have ways to deal with these numbers, so breathe deep and easy and know that we have your back on this.
Okay - let's say that all you have is Medicare A and B (more on that in a minute). If you end up in the hospital for a couple of days and the bill is $50,000 Medicare would pay approximately $40,000 (80%) and you would end up being responsible to pay over $10,000 (20%). Additionally both A & B have deductibles that have to be met before Medicare kicks into their 80%. You can imagine how quickly you could get into financial difficulty. A $50,000 bill could be nothing more than one or two days in a hospital. Something like a knee replacement can cost $75,000 and a heart surgery can run in the $250,000 range. So if all you have is Medicare A & B you had better learn the word "bankruptcy" unless you are part of the 1%.
So let's talk about the four parts of Medicare:
Medicare Part A is about hospital coverage. While there is rarely a premium for your Part A coverage (which you have essentially been paying for through your taxes) there is a $1,553 per occurrence deductible. So if you end up in the hospital your bill would be $1,553 + 20% of the rest of the bill. (Don't worry - we will show you how to make it so you don't have to pay this.)
Medicare Part B is about doctor coverage. Medicare Part B is the one that you have to apply for (we will cover this in another blog) and there is a monthly premium. For 2022 that premium is $170.10 and it normally comes automatically out of your Social Security before your are paid (unless you are not yet collecting SS in which case they will bill you). There is also a $233 per year deductible.
Everything above is what consisted of as "Original Medicare." The next two parts of Medicare are about drugs (Part D) and Supplements (Part C)
Medicare Part C: The answer to your financial concerns. All those deductibles and 20% costs are covered under Medicare Part C. With Part C you have some options, predominantly either a Medigap policy or an Advantage Plan. These options can save your financial future if you are guided to the right one for your needs. These are also what all the phone calls and advertisements are about. For more information Medigap and Advantage Plans, see the other blogs will will have
Medicare Part D: Your drug plan. By Medicare rules you have to have a drug plan and if you do not sign up for one you will be penalized (the good old government likes their penalties). Drug plans can come in the form of a stand-alone RX plan or as part of an Advantage Plan. This will be covered in another blog.
Finally - regarding Joe Namath...he was a cruddy quarterback and he is not telling you the full truth.
As always - give us a call if you would like our help or have any additional questions.
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