Medicare has four parts:

• Part A – Hospital Insurance
  • Covers inpatient care in hospitals, skilled nursing facilities, some home health and hospice care. Part A does not cover long-term care.
• Part B – Medical Insurance
  • Covers Doctors’ services and outpatient care, other medical services that Part A doesn’t cover (like physical and occupational therapists), and some home health.
• Part C – Medicare Advantage Plans
  • Private companies such as Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and private Fee-for Service plans provide both Part A and Part B benefits to eligible people who enroll. Many plans cover prescription drugs as well.
• Part D – Medicare Prescription Drug Coverage
  • Private companies contract with Medicare to provide coverage.

Many people get their Medicare health coverage in one of two ways. Your costs vary depending on coverage and services you use. This diagram from the Ohio Department of Insurance gives a good overview of the coverage options for Medicare.

Resources for each of the above options:

• www.savingwithaging.com  (Don Olson) 614-410-6519 | 1-800-472-0552
• www.medicare.gov
• http://www.insurance.ohio.gov/Consumer/OCS/CompleteGuides/CompleteMedSupGuide.pdf
  

Monthly premium for Original Medicare
Most people will not pay a premium for Part A because they paid Medicare taxes while working. If you do not receive a premium-free Part A, the cost could be up to $461/month.

For most people, the Part B monthly premium will be either $96.40 or $110.50 per month. This premium may be adjusted annually. Higher incomes require a higher premium.

Deductibles and Costs

Part A Costs for Covered Services and Items:

• 2010 Costs for Hospital Stay
  • $1,100 deductible and no coinsurance for days 1-60 each benefit period 
  • $275 per day for days 61-90 each benefit period
  • $550 per “lifetime reserve day” after day 90 each benefit period (up to 60 days per lifetime
  • All costs for each day after the lifetime reserve days
  • Inpatient mental health care in a psychiatric hospital limited to 190 days in a lifetime
  • Payment to doctor for certain medical and other services when a hospital inpatient
• 2010 Costs for Skilled Nursing Facility Stay 
  • $0 for the first 20 days each benefit period 
  • $137.50 per day for days 21-100 each benefit period 
  • All costs for each day after 100 in a benefit period.

Part B Deductible for Covered Services and Items

• In 2010 you pay the first $155 yearly for Part B covered services or items.

MedSup is sold by private insurance companies to fill coverage gaps in original Medicare. The standardized plans, named A through N, work only with the Original Medicare and selected Health Care plans. The monthly premium for MedSup depends upon the plan (Plan a, Plan C, etc.) and can range from $100 up.

Medicare Advantage Plans

These plans provide an option to Original Medicare with “MedSup” insurance. Private companies offer these plans to work with Medicare. You must have both Part A and Part B to enroll. Medicare Advantage Plans may offer extra coverage such as vision, hearing, dental and/or health and wellness programs. Most include Medicare prescription drug coverage. In addition to the Part B premium, you usually pay one monthly premium for the services.

Medicare Drug Plans (Part D)

Exact coverage and costs are different for each Medicare drug plan, but all plans mus provide at least a standard level of coverage set by Medicare. Most plans charge a monthly fee that varies by plan. You pay this fee in addition to the Part B premium. If you belong to a Medicare Advantage Plan (like an HMO or PPO) or a Medicare Cost Plan that includes Medicare prescription drug coverage, the monthly premium may include an amount for prescription drug coverage.

Source: Guide to Medicare & Supplemental Insurance, Medicare Otpions and Part D, Ohio Department of Insurance; November 2009 – and – Medicare and You, 2010, Centers for Medicare and Medicaid Services

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