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Understanding Original Medicare (Parts A & B)

Navigating the complexities of Medicare can feel like decoding a puzzle, but understanding the basics is essential for making informed healthcare decisions. Original Medicare, comprised of Part A and Part B, forms the foundation of coverage for millions of Americans aged 65 and older.

Medicare Part A: Hospital Insurance Explained

Medicare Part A, often referred to as hospital insurance, is designed to cover inpatient hospital care, skilled nursing facility care, hospice care, and some home healthcare services. Here’s a closer look at what Medicare Part A entails:

Hospital Stays

Medicare Part A helps cover the costs of inpatient hospital stays, including semi-private rooms, meals, nursing services, and medications administered during the hospital stay. Beneficiaries are responsible for a deductible amount for each benefit period, which is adjusted annually.

Skilled Nursing Facility Care

Part A covers skilled nursing facility care for rehabilitation following a qualifying hospital stay, such as physical therapy or occupational therapy. To qualify for skilled nursing facility care under Part A, beneficiaries must meet specific criteria, including a qualifying hospital stay and a need for skilled care.

Hospice Care

Medicare Part A provides coverage for hospice care for individuals with a terminal illness, focusing on comfort and quality of life rather than curative treatment. Hospice services may include pain relief medications, counseling, medical equipment, and respite care for caregivers.

Home Health Services

Part A covers home healthcare services provided by a skilled nurse, physical therapist, or other healthcare professionals on a part-time basis. Beneficiaries must meet specific criteria, including being homebound and requiring skilled care.

Medicare Part A Costs

For most beneficiaries, Part A is premium-free if they or their spouse paid Medicare taxes while working for a sufficient period. If you do not qualify for premium-free Part A, you may be able to purchase it, but there are monthly premiums associated with it.

Deductibles and Coinsurance

Hospital Stay Deductible: Beneficiaries are responsible for a deductible amount for each benefit period, which is adjusted annually.

Coinsurance: After the deductible is met, beneficiaries typically pay a coinsurance amount for each day in the hospital beyond a certain number of days.

Skilled Nursing Facility Coinsurance: Part A covers skilled nursing facility care for the first 20 days in full, but beneficiaries are responsible for coinsurance for days 21 through 100.

Medicare Part B: Medical Insurance Coverage

While Part A focuses on hospital and inpatient care, Medicare Part B extends coverage to medical services and outpatient care. Here’s what you need to know about Medicare Part B:

Physician Services

Part B covers medically necessary doctor visits, including office visits, preventive services, and outpatient consultations.

Medicare Part B provides coverage for preventive services such as screenings, vaccinations, and annual wellness visits.

Outpatient Care

Ambulatory Services: Part B covers outpatient care, including visits to outpatient facilities, ambulatory surgical centers, and emergency department services.

Durable Medical Equipment (DME): Part B helps cover the costs of durable medical equipment such as wheelchairs, walkers, and oxygen equipment.

Diagnostic Tests and Laboratory Services

Part B covers diagnostic tests, including X-rays, MRIs, CT scans, and other imaging services when deemed medically necessary. Part B also includes coverage for laboratory tests, blood work, and diagnostic screenings when ordered by a healthcare provider.

Mental Health Services

Part B covers outpatient mental health services, including therapy sessions, psychiatric evaluations, and treatment for mental health conditions.

Medicare Part B Costs

All beneficiaries are required to pay a monthly premium for Medicare Part B coverage. The standard premium amount may vary each year and is typically deducted from your Social Security payment, for 2024 the premium is $174.70.

Deductibles and Coinsurance

Annual Deductible: Beneficiaries must meet an annual deductible before Medicare Part B starts to pay its share for covered services.

Coinsurance: After meeting the deductible, beneficiaries usually pay 20% of the Medicare-approved amount for most doctor services, outpatient therapy, and durable medical equipment.

Income-Related Monthly Adjustment Amount (IRMAA)

High-income beneficiaries may be subject to an Income-Related Monthly Adjustment Amount (IRMAA) in addition to their standard Part B premium. IRMAA is determined based on your modified adjusted gross income from two years ago, and it applies to individuals with higher incomes.

How Parts A and B Work Together

Original Medicare, comprised of Parts A and B, provides a comprehensive foundation of coverage for beneficiaries. Part A focuses on inpatient hospital care, skilled nursing facility care, hospice care, and some home health services, while Part B extends coverage to physician services, outpatient care, diagnostic tests, and preventive services. Together, Parts A and B work seamlessly to address beneficiaries’ healthcare needs across various settings.

Additional Costs

While Parts A and B cover many healthcare services, there may still be out-of-pocket costs for services not covered by Medicare, such as dental care, vision care, hearing aids, and long-term care. Beneficiaries may also choose to enroll in supplemental coverage, such as Medigap plans or Medicare Advantage plans, to help cover some of these additional costs.

Understanding the nuances of Original Medicare is crucial for making informed decisions about healthcare coverage. At the J G Petit Insurance Agency we can guide you through the entire Medicare application process to make sure that you have the right policy for your individual circumstances.  Call us today on (855) 509-0001 to speak to a Licensed Insurance Agent or book an appointment to get help with your Medicare Insurance.

Not affiliated with or endorsed by the government or Federal Medicare Program.

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John Petit

John has a degree in Finance, a Master’s degree in Management, and is licensed to offer insurance products, financial products such as mutual funds and retirement plans.

Published February 19, 2024. Updated April 2, 2024

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