The Basics: Medicare Part A and B

Grab a note pad and settle into a comfy chair, because it’s time to go over the basics of original Medicare! Familiarizing yourself with the ins and outs will help you properly plan and finance health care costs.

Medicare is just like traditional health insurance but is provided by the government. Part A and Part B fall under the umbrella of “original Medicare” and are designed to cover U.S.-based health care costs. Original Medicare does not cover dental and vision, or prescription drug costs.

Before we jump into how Part A and B differ, you should first familiarize yourself with eligibility requirements.

You may be eligible for Medicare if you:

• Are age 65 and up
• Have had a disability for over two years (at any age)
• Were diagnosed with End State Renal Disease (ESRD) or ALS (at any age)

Medicare Part A

You can essentially think of Part A coverage like hospital insurance. It includes skilled nursing, hospice, and some home health care, but does not cover long-term care expenses. You can expect:

• Most pay no monthly premium (if you worked ten years while paying taxes)
• A $1,484 deductible per benefit period
• $0 coinsurance for hospital days 1-60 per benefit period
• $371 coinsurance for hospital days 61-90 per benefit period
• $742 coinsurance for each day 91-150 per benefit period
• You have an additional 60 days of inpatient hospital care coverage to use during your lifetime. These are called “lifetime reserve days.” Each lifetime reserve day comes with a daily coinsurance of $742.

Medicare Part B

Part B is considered medical insurance and covers physician and outpatient services and durable medical equipment (e.g. a walker or cane). It pays 80% of eligible health care costs and you are responsible for the remaining 20%.

One way Part B differs from Part A is there’s a penalty if you don’t register properly. For this reason, avoid using your friends, doctor, or financial advisor for Medicare advice. Instead, reach out to someone who works in Medicare. Below are some costs associated with this plan:

• The standard monthly premium in 2021 is $148.50, or higher depending on your income
• The deductible for 2021 is $203

Enrollment

The Initial Enrollment Period (IEP) for original Medicare is three months before the month you turn 65, the month you turn 65, and 3 months after the month you turn 65. It’s advantageous to not wait until your birthday month because in doing so your Part B coverage could be delayed and leave you with gaps in coverage.

There are some specific enrollment rules and special circumstances which are discussed in more detail on the Medicare website. Learn more about original Medicare, Part D (prescription drug coverage), and gap coverage in GECU’s on-demand webinar Understanding Medicare. Plus, register for other complimentary credit union events by visiting our Events page. Providing these webinars is just one way GECU hopes to Improve the Quality of Financial Lives here in Cincinnati.