I do many Medicare 101 and Veterans and Medicare seminars, and I see two typical reactions from participants: a) the lightbulb turning on look and b) the deer-in-the-headlights look. Let’s face it, people comprehend differently; some absorb more info at once and others need it in bite-sized pieces. So, I thought writing a series of articles that will address each part of Medicare individually may be the best way for all to grasp it more easily. After all, if you don’t understand it, how are you supposed to make wise decisions?

The series I propose will include the following articles:

1. Original Medicare Part A (this article)
2. Original Medicare Part B
3. Prescription Drug Programs (PDP) Part D
4. MediGap (Medicare Supplements)
5. Part C (Medicare Advantage – which will also be it’s own series)
6. IRMAA (Medicare Income-Related Monthly Adjustment Amount Premiums for the well-to-do)
7. Extra Help and expected changes for 2024
8. MSPs (Medicare Savings Programs – Medicaid)
9. Election Periods: When Can I Change My Plan?
10. Medicare Penalties: What are They and How Do I Avoid Them?

My hope is that you (the reader) will understand Medicare and all its moving parts better and be able to use this information when seeing TV commercials, receiving junk mail, getting a telemarketer call you accidentally answered, and are able to see through the fallacies, sophistry (lies based on truth), and deceptions so you can defend yourself.

I know this is a TALL goal, but we at YourCareRep LLC, put educating our clients as the paramount mission, since you are the one who needs to decide what is best for you. So, let’s get started!

Original Medicare Part A

When I say Medicare, I mean Original Medicare (or Traditional Medicare, as it is used interchangeably). It comes in two parts:

1. Part A, your hospital insurance, and…
2. Part B, your medical insurance

Many believe Part A is the FREE part of Medicare (have you not learned there is no such thing as FREE for anything with the government? But I digress…). Reality check! It’s NOT FREE. You’ve already paid for it.

In order to qualify for Medicare (and Social Security for that matter), you must have worked 40 quarters (10 years) paying FICA (Federal Insurance Contributions Act) taxes. Next time you get a paycheck, pay attention to the deductions. If you have done so, then your Medicare Part A is fully paid for, and you receive it regardless of whether you take Part B or not (but that’s another discussion).

The Costs of Medicare Part A

If you did not work 40 quarters (the reason for quarters and not years is to ensure you lose no points for a partial year of work), then depending on whether you worked 0 to 29 quarters or 30 to 39, will determine your monthly premium. Hint: if you worked 30+ quarters but fell short, get a job at Walmart for a year or two to make up the short fall, just sayin’.

If you worked 0 to 29 quarters, the cost per month for 2023 is $506. If you worked 30 to 39 quarters, then it’s $278. Remember, 4 quarters is one year, so check how many quarters you are missing and you can get a job that will help you earn your Medicare and bring in extra money.

All Things Hospital and Facilities Costs

When you think of Medicare Part A, while there are exceptions to the following statement, in general, it pays for the facilities cost of your care:

• Hospital
• Ambulatory surgical centers
• Skilled Nursing Facilities
• Assisted Living Facilities
• Hospice

…for example. While Part B pays for the medical professionals providing the service (again with exceptions which we will cover in the next article on Part B).

Deductibles, Copays and Coinsurances

When it comes to any health insurance, you must understand the difference between a deductible, copay and a coinsurance. First, copays and coinsurance.

A copay is a fixed amount you owe for any given service, and you will always know how much. A coinsurance is a percentage of the full bill, and since typically you don’t know how much that will be, it’s for an unknown amount.

That is where the financial danger in Original Medicare comes in; it is an 80/20 Fee For Service Plan. What this means is once you’ve met your deductible, Medicare will pay 80% and you will pay the remaining 20%, with no MOOP (maximum-out-of-pocket limit). If the bill is $100K, you will owe $20,000. There are ways to protect against this, so don’t break your computer or phone, yet. We will cover those in the articles on Medicare Supplements and Medicare Advantage.

A deductible, on the other hand, is a set amount you must meet before Medicare pays anything. In Part A, that amount is $1,600 when it comes to a hospitalization. However, this is NOT $1,600 per hospital stay; it is $1,600 per Benefit Period.

What Is A Benefit Period?

A Benefit Period is a 60-day window that is created the first day you are hospitalized as an inpatient. In Part A, you would pay a $1,600 deductible, then Medicare would pay 80% of the remaining bill and you would owe the remaining 20%.

Now, a Benefit Period is tied to a specific incident. Let’s say you were hospitalized for a heart problem. You were discharged from the hospital after a week and you returned within the 60-day Benefit Period window, FOR THE SAME REASON, you would not owe the deductible again because you already paid it for that Benefit Period. If you return for a different reason, it creates a NEW Benefit Period, and you would owe the deductible.

Medicare Part A Deductibles and Copays

Hospital Deductibles

The $1,600 deductible is not the only deductible for hospitalization. For a comprehensive list, you can download the following document (2023 Medicare Costs). But let’s cover those below.

Medicare provides you a maximum of 150 days for hospitalization: 90 days considered regular days, if you will, and an additional 60 days known as lifetime reserve days. Depending on how long you are in the hospital for a Benefit Period will determine any further deductibles you may owe.

Let’s assume the person in this example was in a coma and was required to stay in the hospital for the full 150 days. He or she would owe the following:

• Days 0 to $60 are covered by your initial $1,600 deductible.
• Days 61 to 90 would cost a $400-per-day deductible.
• Lifetime reserve days (91 to 150 days) would cost an $800-per-day deductible.

The average person would never have to worry, as few people stay in a hospital past one month, much less 60 days.

Skilled Nursing Facility Copays

Often, after a hospital stay, a patient is sent to a skilled nursing facility (SNF) for rehab, to strengthen their muscles after being in bed for so long. Medicare provides the first 20 days at $0 copay. However, if you require a longer stay, then days 21 to 100 would cost a $200-per-day copay. If you go past 100 days, the entire bill is on you, as Medicare only covers 100 days.

All this and no dental, vision or hearing benefits. As you can imagine, knowledgeable beneficiaries do not stay on Original Medicare without another policy to cover all the holes, or they choose Medicare Advantage and abandon it all together.

As we continue on this series, you will come to understand your options better and will be able to decide what is best for you. In the meantime, if you have any questions and can’t wait for the other articles, please feel free to contact us for a NO OBLIGATION FREE CONSULTATION, by clicking on CONTACT US. Also, download your FREE digital Medicare & You 2024 guidebook.

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