Medicare Does Not Pay for Everything Even on Medicare Approved Items
On Tip Card#1, we talked about when, where, how to sign up for Medicare Parts “A” and “B”, and Part “D” for your prescriptions. We also talked about “Late-enrollment” penalties and how to avoid them. In this short discussion, let’s talk about Medicare, and what IS & IS NOT covered; and what Medicare actually pays towards various kinds of healthcare needs.
TIP Card #2 – Medicare Does Not Pay for Everything Even on Medicare Approved Items
Medicare began in 1965 as a federal program to take care of the healthcare needs of our seniors (and the disabled in America). It was never designed to pay for ALL of our healthcare costs but rather a portion of them. Our government wanted to develop a program that would take care of the majority of healthcare costs but knew that the beneficiaries of the program would need to contribute as well or else they might take advantage of the program.
Medicare was originally designed to be just two parts;
- Medicare Part “A” which would cover beneficiary hospital costs (and other items), and;
- Medicare Part “B” which would cover the majority of a beneficiary’s medical bills, such as; lab work, x-rays and MRIs, doctors visits, ambulance rides, and many other items.
That was it. Part “A” and Part “B”. There was no drug coverage. Beneficiaries paid all their drug costs and part of their healthcare costs, again because Medicare was not designed to cover everything. Beneficiaries had a financial stake in all other healthcare.
MEDICARE PART “A”
YOUR COST TO HAVE PART “A”
First let’s look at what cost you pay to have Medicare Part “A”. Nothing is free in this world of course. There is a cost for Medicare Part “A”. The good thing is that most of us have already paid it. Remember when you paid payroll taxes? (eg. FICA, FUTA, etc.) Well, part of that was to pay for your Medicare Part “A”. So, if you ever had a job, you may not have to pay for Part “A” now. Most Americans have already paid for it over the course of many, many years. This is a real blessing. Some people have NOT paid for it.
For instance, those that recently immigrated to America and who turned 65 here for instance. Others that just never had a job. These people have to pay for Medicare Part “A” as they receive it. At up to $422/month (in 2018), it’s not cheap either.
PART “A” PAYS FOR...
Part “A” covers “Hospitals” It says it right on your card. Right? What does that mean? It means that when you go into the hospital for a qualifying, “medically necessary” reason, then Medicare may pay for part of the cost. It does not mean that Medicare will pay for ALL of the cost. Maybe just part of it.
But the visit has to be “medically necessary”. This means that Medicare has to have decided at sometime that each possible kind of medical need is either necessary or unnecessary. Medicare does not cover unnecessary medical needs. You will never be able to receive vanity, cosmetic surgery for instance; or hair plugs, or procedures to help with erectile dysfunction. “Medically necessary” means you gotta need it to go on, basically.
So, as a matter of example, let’s pretend that you are admitted to the hospital because of chest pains. You are afraid you might be have had a heart attack and the ambulance brought you to the emergency room and they decided to admit you to the hospital over night so they could run some tests.
This is where Medicare Part “A” will kick in… upon admission. When you are admitted to the hospital is what starts the clock on Medicare Part “A” and your costs begin to climb.
The good news is, usually you will only face one expense on a normal hospital stay. That’s the Medicare Part “A” deductible.
Medicare charges a flat deductible for the use of Medicare Part “A” for your hospital benefit. For 2018, that deductible is $1,340. This means that the first $1,340 of your hospital bill is yours to pay.
After you have paid the deductible, you may be charged co-pays which is a fixed dollar amount tied to each nights stay. The good news here is that there is no co-pay for nights 1-60. All you pay is the deductible.
On nights sixty-one through ninety, you do pay $335 per night.
When you think about a typical hospital per night cost of $1,800 – $2,500, the idea that you only pay $1,340 for the first 60 nights is not so bad. BUT, this is just for the hospital stay (like the cost for a hotel room). This does not cover a lot of expenses you could incur during a hospital stay.
Many other expenses, both while in a hospital and out are paid for by Medicare Part “B”. This would include doctors visits, specialists, lab tests, MRI’s, X-rays, ambulances, and many other procedures, etc.
MEDICARE PART “B”
So just like with the last section, let’s talk about what the costs are to have Medicare Part “B” and what it covers.
YOUR COST FOR MEDICARE PART “B”
First, just like with Part “A”, there is a premium. This one more than likely you WILL pay. Part “A” was probably paid during your years of employment. Part “B” you pay now. For 2018, the premium for Medicare Part “B” is $134 (or higher) per month. Most of us have this amount taken right out of our social security checks. There can be additional costs if you have a higher income or if you are not taking your social security, and therefore having to pay your Medicare Part “B” premium by check (3 months at a time more than likely).
PART “B” PAYS FOR…
Many of your healthcare needs are paid for by Part “”B”
To go on to Tip Card #3
To go back to Tip Card #1
- Getting Started with Medicare
- Getting Medicare if You Have a Disability
- The Part B Late Enrollment Penalty
- The Part D Late Enrollment Penalty