What Does Medicare Part A Pay For?
• initial hospitalization
• post-hospital care
• treatment in a rehabilitation facility
• skilled nursing care (from a nurse)
• home health care (such as physical therapy)
Medicare Part A does not pay for routine medical care, such as annual physicals, most routine doctor visits, dental care, eye care, or cosmetic surgery. (Medicare Part B does pay for eye care and sometimes cosmetic surgery, but at a higher rate.)
Medicare Part B
Medicare Part B pays for medical services provided by health professionals, such as physicians, nurse practitioners, and certain medical technicians. It also covers supplies, such as bandages, needles, and syringes, and some medical equipment, such as wheelchairs, home-oxygen equipment, and hospital beds. (Medicare Part A pays nothing for these.) Part B also pays for physical therapy and other rehabilitative services, laboratory tests, and outpatient care.
Part B does not pay for any care that is covered by Medicare Part A, nor for long-term care in a nursing home.
Part B also does not pay for preventive care, such as annual physicals, immunizations, eye exams, and dental care.
Medicare Part D
Medicare Part D pays for prescription drugs. However, it is a voluntary program, and you must sign up for it if you wish to participate.
You can sign up for Medicare when you are first eligible, or you can wait until later. Generally, the earlier you sign up, the less you will pay.
If you sign up early, you will pay the full cost of your drugs each month. However, you will pay a lower premium when you sign up for Part D later on, because you will be covered by your employer's group insurance plan at that point. (In other words, the premium you pay for Part D will be based on the premium of your group insurance plan, and your employer will pay the rest.)
If you sign up for Part D late, you will not get any subsidy for your premiums. But you will avoid the higher Medicare Part D premiums that come into effect once you are retired.
If you are not eligible for premium-free Part A, or if you do not sign up for Part D, you will have to pay all of the cost of your drugs yourself. For more information, see Medicare Part D.
How Much Will I Pay for Medicare?
While you are working, Medicare premiums are deducted from your paycheck by your employer. When you retire, you will pay the premiums directly.
The amount of your premium will depend on a number of factors, including whether you choose to join a Medicare managed-care plan or a conventional fee-for-service plan, and the income you have. When you first become eligible for Medicare, you will receive a notice telling you how much your premium will be, and how much you must pay each month.
In 2011, the monthly premium for basic Part A and Part B coverage is $1,088.80. (If you have Parts A and B only, your premium will be much lower, around $226 a month.)
If your income is low, you may not have to pay any Medicare Part B premium at all. In 2011, if you have income below $85,000 a year, your Part B premium will be $0.00. If you make more than $85,000, you will pay an additional surcharge, based on your income. This surcharge increases as your income rises. If you make more than $170,000 a year, your Part B premium will be $335.50. You can get more information on www.medicare.gov.
When Will I Pay the Premium?
Once a year (in the fall), you will receive a notice telling you how much you will have to pay for the coming year. You will be given a payment schedule, and you should pay the premium in following months, on the schedule provided. If you miss a payment, your coverage may end.
If you are enrolled in an employer's group insurance plan, your premium will be paid by your employer. You need not send payments to Medicare.
How Do I Pay the Premium?
Once you receive the notice from Medicare, you will be given a choice of where to send your check. There are two ways you can pay the premium:
• You can pay by check or money order, payable to the U.S. Treasury, and mail it to the address on your notice (you can find the address on the notice).
• You can sign up with a private insurance carrier or with the U.S. Treasury Department to have Medicare deduct the premium from your bank account each month.
If you choose the second option, Medicare will automatically deduct the premium from your bank account on the first day of the month, and you will not have to send in a check.
If I Win the Powerball Lottery, Can I Still Get Medicare?
If you win the lottery, you will still be eligible for Medicare. However, you will not get any money from the lottery.
When Should I Join?
You should join as soon as you are first eligible. If you wait, you will be penalized for the length of time you have been eligible for coverage.
If you are 65 and become eligible for coverage in June, you will have to pay a penalty for each of the months you could have joined, from June through the next March. If you could have joined in June, July, August, September, and October of the current year, you will have to pay a penalty for four months.
The penalty will be the same amount that you would have paid in monthly premiums if you had joined in June. If you join in June, your monthly premium will be $110.80, and the penalty for the five months will be $543