Medicare is available to individuals who are 65 years or older, younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant). Eligibility typically requires that the individual or their spouse have paid into the system through payroll taxes for a sufficient number of quarters.
Medicare Part A (Hospital Insurance)
- Coverage:
- Inpatient Hospital Care: Covers semi-private rooms, meals, general nursing, medications, and other hospital services and supplies.
- Skilled Nursing Facility Care: Coverage includes a semi-private room, meals, skilled nursing and rehabilitative services, and other services and supplies after a qualifying 3-day inpatient hospital stay.
- Hospice Care: Covers drugs for pain relief and symptom management, medical, nursing, social services, and certain durable medical equipment and supplies for comfort.
- Home Health Care: Includes part-time skilled nursing care, physical therapy, occupational therapy, speech-language pathology services, medical social services, and home health aide services.
- Costs:
- Premiums: Most beneficiaries don’t pay a premium due to having 40 quarters of Medicare-covered employment.
- Deductibles and Coinsurance: $1,632 deductible for each benefit period for hospital stays. Days 61-90 in the hospital have a $408 daily coinsurance. Days 91 and beyond have a $816 daily coinsurance per each “lifetime reserve day” (up to 60 days over your lifetime). Beyond lifetime reserve days, you pay all costs.
- Skilled Nursing Facility: Days 1-20 are covered in full. Days 21-100 have a $204 daily coinsurance.
Medicare Part B (Medical Insurance)
- Coverage:
- Outpatient care, doctor visits, preventive services, and home health care.
- Coverage for durable medical equipment (DME), like wheelchairs, walkers, and hospital beds.
- Many preventive services and screenings are covered, including annual wellness visits, mammograms, and colonoscopies.
- Costs:
- Premium: The standard monthly premium for Medicare Part B will be $174.70, an increase of $9.80 from 2023.
- Deductible: The annual deductible for Medicare Part B beneficiaries will be $240, up by $14 from 2023.
- Coinsurance: After the deductible, you generally pay 20% of the Medicare-approved amount for most doctor services, outpatient therapy, and DME.
- These increases are mainly due to projected rises in healthcare spending and adjustments related to the 340B-acquired drug payment policy.
- Immunosuppressive Drug Coverage: Starting in 2023, individuals whose Medicare coverage ended 36 months post-kidney transplant can opt to continue Part B coverage for immunosuppressive drugs by paying a premium. For 2024, this premium is set at $103.00
Medicare Part C (Medicare Advantage)
- Coverage:
- Combines Part A and B and often includes Part D.
- Additional benefits can include dental, vision, hearing aids, fitness programs, and wellness services.
- Some plans offer extras like transportation to doctor visits, over-the-counter medications, and services for health and wellness.
- Costs:
- Varies by plan. You still pay the Part B premium, plus any additional premium set by the plan.
- Costs for services and prescription drugs can differ from Original Medicare, with different copays and coinsurance rates.
Medicare Part D (Prescription Drug Coverage)
- Coverage:
- Offers prescription drug coverage through standalone plans or included in Medicare Advantage plans.
- Covers a range of prescription drugs that Medicare beneficiaries commonly need.
- Costs:
- Premiums: In 2024, the average monthly premium for Medicare Part D, is projected to be approximately $55.50.
- Deductibles: Most plans will charge a deductible, with the standard amount being $545. This deductible is the maximum amount that a Part D plan can charge in a year. However, it’s important to note that this does not represent the total out-of-pocket costs for the year; rather, it’s the amount that beneficiaries must pay before their plan begins to cover a portion of their drug costs.
- Coinsurance/Copayments: Varies depending on the plan. After meeting the deductible, you pay a share of the cost of your medications.
- Additionally, the average Medicare beneficiary will have a choice of close to 60 Part D plans in 2024, including 21 Prescription Drug Plans (PDPs) and 36 Medicare Advantage-Prescription Drug plans (MA-PDs). The estimated base beneficiary premium for these plans is projected to be $34.70. The average monthly premium for PDPs is expected to increase by 21% to $48, while the average monthly premium for MA-PDs is projected to remain stable at $40.
- However, it’s important to note that some beneficiaries might see larger increases in their premiums depending on their specific plan and location.
Additional Considerations
- Income-Related Costs: Higher-income beneficiaries may pay more for Parts B and D.
- Late Enrollment Penalties: If you don’t sign up for Part B or D when you’re first eligible, you may have to pay a late enrollment penalty.
- Coverage Gaps: Part D has a coverage gap (“donut hole”) where you might pay more for drugs after reaching a certain limit until catastrophic coverage kicks in.
Medicare Savings Programs (MSPs):
- Streamlined Enrollment: A new rule has been finalized to streamline enrollment in MSPs, aiming to make coverage more affordable for an estimated 860,000 people.
- Part D Low-Income Subsidy (LIS): This helps cover the Part D premium and reduces prescription drug costs. The Inflation Reduction Act has expanded the number of people eligible for full LIS.
Each part of Medicare has specific benefits and costs, and the choices can be complex. It’s important for beneficiaries to review their healthcare needs and select the best options available to them.
Medicare What is Not Covered?
Medicare does not cover certain medical procedures and services, including:
- Long-Term Care: Extended nursing home stays or custodial care.
- Most Dental Care: Routine dental exams, cleanings, fillings, dentures, and most tooth extractions.
- Eye Examinations for Prescription Glasses: Routine eye exams for prescribing glasses (though some parts of Medicare may cover eye exams for specific medical conditions).
- Cosmetic Surgery: Procedures that are not medically necessary.
- Hearing Aids and Exams for Fitting Them: Routine hearing exams and hearing aids.
- Acupuncture: Most acupuncture treatments.
- Routine Foot Care: Certain types of foot care services.
These exclusions necessitate that individuals either pay out-of-pocket, obtain supplemental insurance, or explore other insurance options for coverage of these services.
What about People Living Abroad – Expatriates
Medicare generally does not provide coverage for U.S. expatriates living outside the United States, with a few exceptions. Here are some key points regarding Medicare coverage for expatriates:
- Limited Coverage Abroad: Basic Medicare (Parts A and B) does not typically cover medical services received outside the U.S. and its territories, except in very specific situations. This means that routine healthcare received while living abroad is not covered by Medicare.
- Enrollment from Abroad: Expatriates can enroll in Medicare from abroad once they become eligible. However, since Medicare does not usually cover care outside the U.S., expatriates need to consider whether it is beneficial to maintain enrollment in Parts A and B. For instance, if they plan to return to the U.S. frequently or live abroad temporarily, having Medicare might be advantageous.
- Premium-Free Part A: Most people qualify for premium-free Part A, which covers hospital insurance. This means that if expatriates have Medicare Part A and return to the U.S., they can avail themselves of hospital coverage without having paid premiums while abroad.
- Avoiding Late-Enrollment Penalties: Expatriates who work overseas and have qualifying insurance (as defined by the U.S. government) can generally avoid late-enrollment penalties for Medicare if they sign up after age 65. This provision helps expatriates who might not need Medicare coverage immediately upon reaching eligibility age due to living abroad.
Expatriates should carefully assess their health care needs, plans for returning to the U.S., and the costs and benefits of maintaining Medicare coverage while living abroad.