Medigap Basics

Medicare can  be confusing to people.  There are various parts and deadlines that are overwhelming.  Generally speaking, Medicare covers about 80% of the costs associated with receiving medical treatment. The remaining 20% needs to be paid by the “beneficiary” or an insurance plan purchased by the beneficiary.  Medicare now covers annual preventative health exams and testing; along with hospice care.

Medicare covers certain medical services and supplies in hospitals, doctor’s offices and other health care settings; and is broken into two sections: Part A -which is associated with hospitals and  has a deductible of $1,132 (2011).  After the deductibles are met, you, the beneficiary would pay for about 20% of the services you received.  Medigap insurance can be purchased to offset the cost of the deductibles and co-pays.

Part A

If you have worked in the United States and paid Medicare taxes  you don’t pay a premium for Part A.   If you aren’t eligible for premium-free Part A you may be able to buy Part A if you meet certain requirements and are aged 65 or over.

If you are currently receiving Social Security benefits, you will be automatically enrolled in Part A.  If not, contact Social Security 3 months before your 65 birthday at www.socialsecurity.com to apply for benefits online.  You have 7 months to enroll when you are first eligible for benefits: three months prior to your 65 birthday, the month of your birthday and three months after you turn 65.

Part A Covers:

  • Inpatient care in hospital
  • Inpatient rehabilitation centers
  • Inpatient skilled nursing facility
  • Hospice care services
  • Home Health Care Services

Part B

Part B covers services related to what happens in a doctor’s office and durable medical equipment.  It, too, has a deductible of $162 (2011) after which you would be responsible for the 20% of the services you received unless you had a medigap plan to pay it for you.

Contact Social Security to enroll on line.  You can sign up for Part B starting 3 months before your 65 birthday; or you can postpone signing up if you are covered by other credible health insurance.   There is no late enrollment penalty if you have credible coverage, however, if you don’t sign up when you are first eligible there may be a 10% penalty for for each full 12-month period you could have had Part B and but didn’t sign-up for it.

  • Doctor Service
  • Durable Medical Equipment
  • Emergency Room Services
  • Flu Shots
  • Skilled Nursing Home Health Care
  • Outpatient Services
  • Physical Therapy
  • Tests
  • and more

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