Original Medicare is the federal insurance program that provides guaranteed healthcare coverage for people 65 and older, as well as younger people who qualify due to a disability. It was created to ensure healthcare coverage and financial stability for our nation’s older and more vulnerable populations. Medicare itself has four parts: Part A, Part B, Part C, and Part D. However, Original Medicare or traditional Medicare, consists of just two parts, Part A and Part B. To find out more about the other parts and how they work check out our Medicare page.
Medicare Part A is hospital insurance, and covers inpatient care and services, as well as skilled nursing facility care. Part A coverage, in general, covers things like:
- Semi-private hospital rooms
- Hospital meals
- Inpatient lab tests and X-rays
- Operating room and recovery room services
- Drugs and medical equipment used while in the hospital or skilled nursing facility
- ICU care
- Skilled nursing services
- Hospice care
Part A does not cover personal care services in the hospital. These services include assistance with eating, bathing, or dressing, as well as comfort items such as a phone or television.
If you or your spouse did not work or pay Medicare taxes for at least ten years, you will most likely have to pay a Medicare Part A premium. Otherwise, there is no Part A premium. You will, though, have to meet a deductible, as well as pay copays and coinsurance with Part A.
Part A coverage and costs are determined by “benefit periods.” Each benefit period begins the day you are admitted to a hospital or skilled nursing facility and ends when you have been out of the hospital or facility for 60 consecutive days. Part A imposes a deductible for each benefit period. Once you have met that deductible, Part A will cover the majority of inpatient costs for up to a 60-day stay. If you stay in the hospital for more than 60 days, you may have to pay coinsurance.
It’s worth noting that one benefit period – and one deductible – may cover two or more inpatient stays. If you are discharged from a hospital or skilled nursing facility and readmitted within 60 days, the benefit period and deductible remain the same. A new benefit period begins only after you have been out of the hospital for 60 consecutive days.
Medicare Part A Premiums
Part A has no premium for most people. To be eligible for premium-free Part A you must be at least 65 years old and eligible for monthly Social Security or Railroad Retirement Board (RRB) cash benefits. If you receive monthly Social Security or RRB benefits for at least 4 months prior to turning 65, you do not need to file a separate application to become eligible for premium-free Part A. In this case, you will automatically enroll in Part A at age 65.
If you do not qualify for premium-free Part A, you can still purchase it. As of 2023, the premium for Part A is $278 or $506 a month, depending on how long you or your spouse worked and paid Medicare taxes.
If you will have to pay a premium for Part A, you will not be automatically enrolled when you turn 65. To enroll you must:
- Contact the Social Security Administration to submit an enrollment application.
- Enroll during a valid enrollment period.
- Enroll in or have Part B already.
To keep premium Part A, you must pay all monthly premiums and remain enrolled in Part B. This means that you must pay both your Part B and Part A premiums on time in order to maintain this coverage.
Medicare Part B covers doctor visits and outpatient care. Outpatient care includes services provided in a doctor’s office, retail clinic, urgent care center, or emergency room.
Part B coverage generally includes:
- Doctor visits and services
- Some preventative screenings and services
- Ambulance services
- Outpatient surgery services
- Mental health care
- Some durable medical equipment
- Some medically necessary tests such as X-rays, MRIs, CT scans, and EKGs
Medicare Part B also has out-of-pocket costs, including an annual deductible, copays, and coinsurance. As well as a monthly premium based on your yearly income. Part B calculates costs as you use covered health services, rather than as part of benefit periods.
Medicare Part B Premiums
Part B premiums are based on your Income Related Monthly Adjustment Amount (IRMAA), but the average monthly cost is $164.90. Since your premiums are based on your IRMAA, if you have a higher income, your premium will cost more. In addition to your premiums, you’ll also have to meet a $226 annual deductible; after you do so, you’ll be responsible for 20% of your medical costs. Both the average premium and deductible are as of 2023, and those amounts usually change every year.
How to Get Original Medicare
How you get Medicare is based on whether you’re eligible due to age, disability, or because of a specific illness.
If you’re 65, or about to turn 65 (64.5), there are two approaches to getting Original Medicare. The first option is to allow yourself to be automatically enrolled in Original Medicare through The Social Security Administration. You can then pay an additional fee to add coverage for things like prescription drugs (Part D), or out-of-pocket expenses (Medicare Supplement Plans). Which can be purchased through private insurers.
The second option is to enroll in a Medicare Advantage (Part C) plan. Which includes Parts A and B coverage, as well as Part D prescription drug coverage. It also includes additional benefits such as vision, dental, hearing, and extras like wellness/fitness programs. Medicare Advantage plans are available from private insurance companies that have been approved by Medicare.
By Disability or Disease
Anyone who qualifies for monthly Social Security or Railroad Retirement Board (RRB) benefits is automatically eligible for Part A after receiving disability benefits for 24 months. After 29 months of disability, federal, state, and local government employees who are not eligible for monthly Social Security or RRB benefits may be eligible for disability benefits. Additionally, this also makes you automatically eligible for Part A.
Certain diseases such as Amyotrophic Lateral Sclerosis (ALS) can qualify you for Medicare at any age. You will be eligible for Part A benefits the first month you are eligible for Social Security or RRB disability cash benefits. There is no wait time.
Another qualifying disease is end-stage renal disease (ESRD). You will be eligible for premium-free Part A if you receive regular dialysis or a kidney transplant, have applied for Medicare, and meet one of the following criteria:
- You worked the number of years required by Social Security or the Railroad Retirement Board (RRB), or as a government employee
- You are the spouse or dependent child of someone who has worked the number of years required by Social Security or the RRB, or as a government employee
- You are receiving or are eligible for Social Security or RRB benefits.
Original Medicare Enrollment Periods
If you are eligible for premium-free Part A, but were not automatically enrolled when you turned 65, you can enroll in Part A at any time after you become eligible.
If you want premium Part A, Part B, or both, you can only enroll during the designated Medicare enrollment periods. Both premium Part A and Part B have the following enrollment periods:
- Initial Enrollment Period – Your IEP is the 7-month time frame that begins three months before your 65th birthday and ends three months after your 65th birthday. If you are under 65 but become eligible for Medicare due to a disability and have been receiving Social Security Disability Insurance (SSDI) or railroad disability annuity checks for 24 months, you should automatically enroll in both Medicare Parts A and B. This would happen at the start of your 25th month. If this is the case for you, your IEP will begin three months before your 25th month of disability benefit eligibility, include the 25th month, and end three months later. The IEP for people with ESRD and ALS differs depending on their circumstances.
- General Enrollment Period – The GEP is a three-month period that runs from January 1 to March 31 of each year. During which you can enroll in Original Medicare, as well as apply for a Medicare Part D plan. Part B and premium Part A coverage will begin the month following enrollment.
- Special Enrollment Period – There are some circumstances in which you will be able to enroll in Part B (and premium Part A) without incurring a late enrollment penalty. If you experience a qualifying life event you will have a SEP opened up for you. These events could be moving out of your plan’s coverage area, or leaving a job where you were under a group health plan. Additionally, if your insurer no longer offers your plan this would also open an SEP. A Special Enrollment Period is only for a short period of time. So, if you do not sign up during your Special Enrollment Period, you will have to wait until the next General Enrollment Period. Which means you may have to pay a monthly late enrollment penalty.
Part A Late Enrollment Penalty (LEP)
If you do not enroll in premium Part A when you first become eligible, you may have to pay a higher monthly premium if you decide to enroll later. Part A monthly premiums may increase for you by up to 10%. You will have to pay the higher premium. The higher premium lasts for twice the number of years you could have had Part A but did not enroll.
If you enroll during a SEP, your Part A LEP will be calculated by adding the months between the end of your IEP and the end of the month you enroll in Original Medicare. Months in which you had group health plan coverage do not count towards the LEP calculation if you enroll after your IEP ends.
Part B Late Enrollment Penalty (LEP)
If you do not sign up for Part B when you first become eligible, you might have to pay a late enrollment penalty. You will have to pay this extra cost for the rest of your life once you do enroll. Your monthly Part B premium may increase by 10%. You will pay this increase for each full 12-month period during which you are eligible for Part B but did not sign up for it.
If you enroll during an SEP, your Part B late enrollment penalty is calculated by adding the months between the end of your IEP and the end of the month you enroll in Original Medicare. Months you had group health coverage don’t count towards the LEP calculation if you enroll after your IEP ends.
Who qualifies for Medicare?
Generally you have to be 65 to be eligible for Medicare. However there are certain diseases that may qualify you before you turn 65. If you have End-Stage Renal Disease (ESRD) or ALS you may qualify for some Medicare benefits sooner.
Am I automatically enrolled in Medicare at 65?
If you are on social security then yes you’ll be automatically enrolled. Otherwise you have to enroll for yourself during your initial enrollment period (IEP). This is three months before you turn 65, and the 3 months after.
Does Medicare come out of my social security check?
Yes, if you are enrolled in Medicare Part B and have Social Security then your premium will be automatically taken out of your social security check.
Is Medicare based on your income?
Yes, Medicare premiums are based on your modified adjusted gross income (MAGI). This is your total adjusted gross income in addition to any tax-exempt interests.
What does Medicare pay for?
Part A covers your hospital insurance. This is your inpatient hospital care, skilled nursing facility, hospice, lab tests, surgeries, or even home health care. Part B is in charge of your general medical needs such as doctor’s visits, medical equipment, and preventative services.
Since Original Medicare doesn’t cover everything, how do I fill in the gaps?
Medicare supplement plans do exactly that. You can enroll in a Medicare supplement plan once you’ve enrolled in Medicare Part A and B. These plans offer coverage for a variety of different gaps in coverage to help you tailor your plan to your needs.
If I sign up during my IEP will benefits immediately kick in?
If you enroll during the first three months of your IEP your benefits kick in the month you turn 65. If you sign up in your birthday month then your benefits start the first of the following month. However, if you sign up after your birthday month you can end up waiting 2 to 3 months for coverage.
Does Medicare cover substance abuse?
Medicare will pay for both inpatient and outpatient care for a substance use disorder (SUD), depending on the situation. However there are some big holes in the coverage. Part B will pay for some basic screenings and outpatient care. While Part A will cover a hospital stay for an SUD that has gotten bad enough to require hospital care. But there is a wide variety of treatments and medications for drug use that won’t be covered.
How EZ Can Help
EZ can assist you in enrolling in Medicare, purchasing a Medicare Supplement Plan, or simply weighing your options. Our agents work with the best insurance companies in the country. They can provide you with a free comparison of all available plans in your area. We will go over your medical and financial needs and help you find a plan that meets your needs. To get started, simply give one of our licensed agents a call at 877-670-3602.