What Does Medicare cover?

Medicare has many parts. Here is a quick breakdown of what Medicare covers.
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Introduction

If you are just starting to learn about Medicare, you might be wondering what does Medicare cover?

The 5 key options that you need to be aware of are:

What is Covered by Medicare Part A?

Medicare Part A is part of Medicare that covers your inpatient hospitalization services.  These services include inpatient hospital care, skilled nursing facilities, hospice care, and in some instances home health care. Most people will be eligible for premium-free Part A coverage if they or their spouse have paid Medicare taxes for 10 years (40 quarters).

For inpatient hospital care, Medicare Part A will cover services like semi-private rooms, meals, nursing, and drugs used for inpatient care.  These services will be provided once you have been admitted as an inpatient at a hospital by an official doctor’s order.

Part A will typically cover up to 60 days without any coinsurance costs after you pay the Part A deductible of $1,484 in 2021.  Additional coverage will require you to pay coinsurance costs for days 61-90 of $371 per day.  If you go beyond this you are responsible for up to 100% of the cost.

Skilled nursing facilities (SNF) are covered in specific situations where a patient has had a ‘qualifying’ hospital stay of at least 3 days or more.  The care must be delivered by, or under the supervision of a skilled nurse or therapy staff that comes from an SNF certified by Medicare.  Medicare will help cover up to the first 100 days of care in an SNF after a ‘qualifying hospital stay’.

If hospice care is needed it will also be covered for terminally ill patients.  Part A covers all the end-of-life services needed which may include, doctors, nurses, aides, medical equipment, certain drugs, occupational therapy, physical therapy, and counseling for the patient and their family.

What is Covered by Medicare Part B?

Medicare Part B is the part of Medicare that covers your outpatient medical services and supplies.  This includes things such as doctor visits, ambulance services, durable medical equipment, mental health services, and certain prescription drugs.

If you enroll in Medicare Part B you must pay the standard Part B premium of $148.50 per month in 2021 (this could be higher depending on your income).  If a service or supply is covered by Part B, Medicare will pay 80% of the cost of the services or supplies and you will be responsible for covering the rest (in other words, you have a 20% coinsurance obligation).   However, you will first need to reach the $198 annual deductible before Medicare insurance kicks in.

If you require ambulance services Part B will help cover the costs of transportation. This includes air and ground transportation for a patient to be taken to the nearest hospital.  In most cases, if you are using emergency room services this will also be covered under Part B unless you are officially admitted as an inpatient by a doctor into the hospital, in which case Part A will help cover the cost.

Part B will also cover durable medical equipment that a doctor has determined is required such as blood sugar monitors, crutches, patient lifts, walkers, wheelchairs, and other equipment that is not usually useful to someone who isn’t sick or injured.

Preventative services are also covered by Part B and in most cases, you will need to pay nothing if you get the services from a health care provider who accepts assignment.  These preventative services include depression screenings, flu shots as well as cancer, depression, HIV, diabetes, bone mass, and cardiovascular-related screenings.

What is Covered by Medicare Part C?

Medicare Part C also known as Medicare Advantage, is an alternative “all in one” bundled alternative to Original Medicare.  Medicare Advantage plans are provided by private insurance companies who contract with the federal government to deliver Medicare to those eligible.  By law, Medicare Advantage plans must provide the same coverage as Medicare Part A and Part B.

Medicare Advantage plans have been gaining popularity, primarily as these bundles often include Part D prescription drug coverage (also known as ‘MA-PD’ plans) as well as extra benefits that are not part of the covered by Original Medicare such as vision, dental, hearing and other wellness benefits.

These plans typically have a provider network that may require you to receive care within the plan’s network in order for the plan to help cover the cost.  It may also require you to select a primary care doctor to coordinate your care as well as referrals prior to seeing any specialists.  Some plans may allow you to see out of network providers but at a higher cost.

In 2020, a significant portion (49%) of Medicare Advantage plans charge no additional premium (also known as ‘$0 premium’ plans) on top of the standard Part B premium.  Medicare Advantage plans will have out of pocket costs which include deductibles, copays, and coinsurance.

What is Covered by Medicare Part D?

Medicare Part D is your prescription drug coverage. This coverage is offered by private insurance carriers and purchased as a standalone plan (also known as Prescription Drug Plans (PDPs)) or bundled as part of a Medicare Advantage plan.  If purchasing standalone PDP plans you will be required to pay a monthly premium in order to receive coverage.

Each Medicare Part D plan must cover at least a standard level of coverage that is set by the government.  In general, Part D plans cover prescription drugs, insulin, and medical supplies associated with the injection of Insulin (e.g., syringes, needles, swabs, and gauze), biologics (drugs made of natural sources that are not chemically synthesized), and certain vaccines.

While most include at least 2 drugs in the most commonly prescribed drug classes for the Medicare population as determined by the CMS.  Formularies may vary between providers and also change during the year as long as the changes follow the guidelines of Medicare.

What is Covered by Medigap?

A Medigap policy is designed to help cover out-of-pocket costs (deductibles, copays, and coinsurance) that you otherwise may be responsible to pay under Original Medicare in return for a monthly premium.

Because of this, Medigap plans cover the exact same services as Original Medicare.  Depending on your situation, they may be a useful insurance policy to manage your cost but will not come with any extra benefits.

Medigap is sold by private insurance companies and can only be used with Original Medicare.  You cannot enroll in a Medigap plan if you are enrolled in a Medicare Advantage plan.

What is Not Covered by Medicare?

In general, Medicare Part A and B will not cover anything that is not considered medically necessary.  This includes long-term care (LTC), custodial care, elective surgery, dental, vision, hearing, and other general wellness.

By law, Medicare Advantage (Part C) plans are required to provide at least the same services coverage as Part A and B and may include extra benefits such as vision, dental, hearing, and other wellness benefits.  However, while Medicare Advantage plans provide more routine wellness services they will generally not cover significant services or procedures such as long-term care or elective surgery.

By law, Part D plans are not allowed to include over the counter (OTC) drugs (although some Medicare Advantage Plans offer this in their extra benefits outside of Part D coverage), weight loss or weight gain drugs, vitamins, cosmetic drugs, hair growth drugs, drugs for erectile dysfunction and any drugs covered under Part A and B of Medicare.

Final Words

When it comes to healthcare, it’s important to know what is covered.  This article gives you a short breakdown of what’s covered by the 5 key parts of Medicare.  While this article gives you a good summary, we recommend you read our comprehensive guides on Medicare Part A, Part B, Part C, Part D, and Medigap to obtain a more detailed understanding of what the right coverage is for you.

At CoverRight, we’re here to help you find the right coverage that you deserve.   Reach out today and start finding the best Medicare plan for you.

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