Medicare Made Simple, Maybe...

I know what you're asking. Can something as complex and confusing as Medicare be made simple? I think the answer is yes! If you have a basic understanding of your options, combined with working with a licensed and experience insurance broker. You have all the tools you need to keep Medicare simple for you. My hope is that this blog can provide useful and relative information to you to help you gain a little more understanding of Medicare and how it works. If you find the content I provide beneficial or not, please let me know in the comments below. Thanks for being here!

-Phil

Over the next few weeks we're going to break Medicare down into more manageable pieces. For this first post, let's focus on the Part A of Medicare. What does it cover? What are the positives? What are the negatives? Is it "free"?

Part A

Many Americans think when they turn 65 that they are going to get free healthcare for the rest of their days. Unfortunately, that couldn't be further from the truth. What they get instead is decent healthcare coverage that has some extremely scary gaps for your wallet and you still get to pay a premium for it (Part B).

Fortunately, you do get your Part A coverage for a very nice $0 premium, as long as you worked at least 40 quarters or 10 years. If you are not sure if you have enough quarters, you can check your status here- https://secure.ssa.gov/RIL/SiView.action - by creating or logging into your Social Security account or calling your local Social Security office. If you do not have enough credits yourself, you can use a spouses work history to qualify for premium free Part A.

Now that we know how you qualify for Premium free Part A, what does it actually cover? Part A is also known as your Hospital Insurance. So, it covers your expenses anytime you are inpatient in the hospital. For example, your semi-private room, your meals, any procedures or tests done while admitted, and your nurses. One thing Part A does not cover while you are in a hospital are your doctors bills. These are paid through Part B, whether inpatient or outpatient. Lastly, Part A also covers any Skilled Nursing Facility stay, which we'll cover later in this blog.

All in all, Part A covers a lot of medical services but it does have a few gaps that are worth mentioning. The first gap is the deductible, which for 2023 is $1,600 for each benefit period (Benefit Period = 60 consecutive days after discharge). After you reach this deductible, which you will, Original Medicare starts to pay. Keep in mind this deductible is good for a benefit period of 60 days that starts from the day of discharge. So, if you are readmitted to the hospital 5 days after you are originally discharged, your deductible is still good. However, if you are readmitted on your 61st day from the original discharge you will have to pay a fresh $1,600 deductible if you go back to the hospital. Not great.

In a worse case scenario, you could end up paying this discharge multiple times during the year if you find yourself with a lot of reoccurring health issues.

There are 2 other gaps in Part A that are worth mentioning. They are not as frequent as the reoccurring deductible but can be even more costly if someone finds themselves needing an extended hospital or skilled nursing facility stay. If you have to stay in the hospital for more than 60 days, starting the day you are admitted, you will begin to pay a daily copay that breaks down like this:

Days 1-60: $0 after you pay your $1,600 deductible

Days 61-90: $400 each day

Days 91-150: $800 each day while using your 60 lifetime reserve days

After day 150: You pay all costs

In the rare instance that you or someone you know has to stay in the hospital for any of these lengths of time, it can become very costly, very quickly.

The last part I will touch on for Part A is if you need to go to a Skilled Nursing Facility (SNF) after a qualifying hospital stay. A qualifying hospital stay is a 3 days. As long as you meet that criteria, have days still in your original 60 day benefit period, Medicare will fully cover the costs for days 1-20. If you end up staying more days, then coinsurance costs will kick in. For 2023 those are:

Days 21-100: Up to $200 per day

Days 101 and beyond: All Costs

Again, these costs can add up very quickly.

Overall, Medicare Part A is not terrible insurance, but if you have a year full of serious health issues and lengthy hospital stays, you could be in for a lot of financial trouble. The next logical question should be - How do we fill those gaps? How do I protect my myself and my family? There are really two options that most people are choosing today - Medicare Supplements or Medicare Advantage Plans. Both of these options help close these gaps and more. We will take a closer look at both of these options in a later post. Really looking to weigh the pros and cons of each. Next, we're going to take a deep dive into Part B of Medicare explaining what it covers, any gaps that are present, and look into the dreaded Part B late penalty and ways to avoid it.

I know it has been a lot of information but my hope is that I was able to provide some valuable information and help to demystify the behemoth that is Medicare. Take care and as always please feel free to reach out with any questions or if you need help on your Medicare journey. You don't have to do it alone!

Sources:

https://www.medicare.gov/

https://www.ssa.gov/benefits/retirement/planner/credits.html