Here’s an overview of how Medicare works if you’re enrolled in Original Medicare, including answers to common questions such as the doctors you can use, what your costs may be, and how prescription drug coverage works.
Original Medicare comes in two parts. Medicare Part A covers hospital services, skilled nursing facility care, hospice, and some home health care. Medicare Part B covers medical services, including doctor visits, preventive screenings, certain vaccinations, lab tests, and durable medical equipment.
Original Medicare doesn’t cover everything. Medicare doesn’t cover the following:
You’ll usually have to pay the full cost for health-care services that Original Medicare doesn’t cover. Medicare Advantage plans may include coverage for some services that Original Medicare doesn’t pay for, such as routine vision or dental, or hearing care.
Original Medicare, Part A and Part B, offers limited prescription drug coverage. You’ll be covered by Medicare Part A for prescription drugs for treatment during a covered inpatient hospital or skilled nursing facility stay. Medicare Part B covers certain medications you get in an outpatient setting (such as a doctor’s office). However, these are usually the types of prescription drugs you can’t give yourself, such as chemotherapy drugs or medications given by infusion.
For coverage of all other prescription drugs, you’ll need to enroll in Medicare Part D and sign up for a Medicare Prescription Drug Plan. This is a stand-alone Medicare plan that works alongside Original Medicare to help cover certain prescription drug costs. In addition to a monthly premium for your Medicare Part D coverage, you may also have cost-sharing expenses, such as deductibles, copayments, and coinsurance.
Original Medicare doesn’t have provider networks. Instead, you can generally use any doctor, health-care professional, or hospital that accepts Medicare patients. This can be especially helpful if you travel frequently or are a “snowbird” who lives in different parts of the country at certain times of the year.
Your costs will generally be lowest if you use a provider that “accepts Medicare assignment.” Here’s how it works: Original Medicare has set approved prices that providers can charge for Medicare-covered services and supplies. If your doctor accepts assignment, this means that he or she agrees to only charge you the Medicare-approved cost for the service. Doctors who don’t accept assignment but still agree to treat you may charge up to 15% above the amount Medicare has approved. You’re responsible for paying this 15% extra charge, on top of your share of the cost.
For example, you’ll usually pay 20% of the Medicare-approved cost for most Part B-covered services, including outpatient care like doctor visits. Let’s say that the Medicare-approved cost for a doctor appointment is $100. If you see a doctor that accepts Medicare assignment, Medicare Part B covers 80% of the cost, or $80, and you’re responsible for a 20% coinsurance, or $20. However, if you see a doctor who doesn’t accept Medicare assignment, he or she may charge you up to 15% more above the Medicare-approved charge, or $115 in this example. Your total bill will include the $20 coinsurance cost, plus the extra $15 charge, for a total of $35.
You can use “participating” providers, which are doctors and hospitals that sign a contract to accept assignment for all Medicare-covered services. Medicare.gov has a Physician Compare tool that makes it easy to find doctors and hospitals that are enrolled in the Medicare program and accept Medicare. If you like, you can filter your search to only show participating providers.
You don’t need a primary care doctor if you have Original Medicare. You can see any doctor who is enrolled in the Medicare program.
You don’t usually need a referral for specialist care if you have Original Medicare. However, make sure that the specialist is enrolled in the Medicare program and takes Medicare patients.
You may have other insurance besides Medicare, such as:
When you have Medicare and other types of coverage, Medicare works with your other insurance to coordinate who pays first. The primary payer is the insurance that pays for your medical bills first, up to the coverage limits and then sends the remaining balance to the secondary payer. Which type of insurance pays first depends on the type of coverage you have.
If you’re still working when you’re eligible for Medicare and have group coverage through your work, you may want to consider delaying Medicare Part B (since it comes with a monthly premium). Medicare Part A is usually free if you’ve worked at least 10 years (40 quarters) and paid Medicare taxes; otherwise, you may owe a premium for Part A and may want to consider waiting to enroll if you have employer-sponsored coverage. You can sign up for Medicare Part A and/or Part B later through a Special Enrollment Period without paying a late-enrollment penalty once you stop working or that coverage ends.
Talk to your benefits administrator for more information on how your insurance works with Medicare. Never drop your coverage without first fully understanding the consequences; you may not be able to get it back.
Your costs may vary, depending on the type of health-care services you use and how often you need them. However, in general, some of your costs in Original Medicare may include:
* As mentioned, Medicare Part A is free if you’ve worked at least 10 years or 40 quarters under Medicare-covered employment. Otherwise, you can sign up for Medicare Part A and pay a monthly premium for it, which will vary depending on the number of work quarters you have.
It’s important to note that Original Medicare doesn’t have an annual out-of-pocket spending limit, meaning there’s no maximum cap, no matter how high your health-care costs get each year.
Keep in mind that your costs may vary, depending on the types of services you need, how often you get them, and other factors. For example, as mentioned, your costs will be lower if you use providers that accept Medicare assignment. If you’re eligible for Medicaid, the state may help pay for certain out-of-pocket costs.
Many beneficiaries purchase Medicare Supplement (Medigap) insurance to help with out-of-pocket costs that Original Medicare doesn’t cover, such as copayments, coinsurance, and deductibles. Medigap plans work alongside Original Medicare.
If you have limited income, you may be eligible for a Medicare Savings Program, which helps with out-of-pocket costs in Original Medicare, such as premiums, copayments, coinsurance, and deductibles. There are four programs available, and each type offers a different level of assistance, depending on your income and eligibility. Medicare Savings Programs are administered by state Medicare programs, so contact the Medicaid department in your state to learn more and find out if you’re eligible.
If you’re enrolled in Medicare Part D and have limited income, the Extra Help program (also known as the Low-Income Subsidy) may help pay for certain out-of-pocket prescription drug costs, such as premiums, copayments, coinsurance, and deductibles. Like Medicare Savings Programs, the Low-Income Subsidy program is run through Medicaid, so contact your local Medicaid program for more information.
Original Medicare is the government-run program, but it may not be your only coverage option as a Medicare beneficiary. As mentioned, Medicare Prescription Drug Plans provide stand-alone prescription drug benefits, and Medicare Supplement plans are also available to help with out-of-pocket costs in Original Medicare. You can also opt to enroll in a Medicare Advantage plan as an alternative way to get your Medicare Part A and Part B coverage. These plans cover at least the same level of benefits as Original Medicare, Part A and Part B. But the benefit of these plans is that you may have the option to get additional coverage not covered by Original Medicare, such as routine vision or dental, hearing, wellness programs, and prescription drugs.
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