Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease.
The income-related monthly adjustment amount (IRMAA) is a fee you pay on top of your Medicare Part B and Part D premiums if you make a yearly income above the annual thresholds. It applies only to Medicare beneficiaries who have a modified adjusted gross income above $103,000 for an individual return and $206,000 for a joint return. If your earnings are below this threshold, IRMAA doesn’t apply to you.
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The Medicare IRMAA is based on the income on your tax return two years prior.
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IRMAA charges apply to eligible Medicare beneficiaries, whether you have Original Medicare or Medicare Advantage.
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You can appeal the Medicare IRMAA if you think a mistake has been made or your circumstances have changed.
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What are the parts of Medicare*?
The different parts of Medicare help cover specific services:
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- Medicare Part A (Hospital Insurance)
Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. - Medicare Part B (Medical Insurance)
Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services. - Medicare Part B (Medical Insurance)
Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services. - Medicare Part C (Advantage Plan*)
Part C covers dental care, hearing, eye care, transportation, groceries, utility bills and additional services not cover by traditional Medicare. - Medicare Part D (prescription drug coverage)
Helps cover the cost of prescription drugs (including many recommended shots or vaccines). Several vendors such as GoodRx and Senior care provide manufactures’ discounts for some prescriptions.
- Medicare Part A (Hospital Insurance)
*Traditional Medicare are parts A & B which makes you eligible for Part C [Medicare Advantage].
Privately-owned insurer such as Aetna and Cigna offer all-in-one plans that cover parts A B, C, and D.
TRADITIONAL MEDICARE CHANGED. RECIPANTANTS OF ADVANTAGE PLAN MAY PAY 100% FOR ITEMS INSTEAD OF 20%
NOTE: The insurance “Advantage or Part C” is a privately-owned social security plan that does not guarantee DME coverage under their Advantage plan if the provider no longer supplies what you need.
For instance, 5 YEARS AGO an in-network provider offered me the wheelchair I needed; my co-pay was approximately $100. After 5 years, I was due a replacement but the provider no longer sold the kind of wheelchair I needed and there was no other in-network provider who could help me.
Although my carrier approved payment to an out-of-network provider, the supplier declined to assist me due to their administrative policy.
In summary, I had to find a supplier who would deliver an assembled wheelchair and buy it outright. In other words, I had to pay 100% out-of-pocket instead of 20%.
The Background of Medicare
Medicare is the federal health insurance program created in 1965 for people ages 65 and over, regardless of income, medical history, or health status. The program was expanded in 1972 to cover certain people under age 65 who have long-term disabilities.
Today, Medicare plays a key role in providing health and financial security to 60 million older people and younger people with disabilities. The program helps to pay for many medical care services, including hospitalizations, physician visits, prescription drugs, preventive services, skilled nursing facilities, home health care, and hospice care.
In 2017, Medicare spending accounted for 15 percent of total federal spending and 20 percent of total national health spending.
Most people ages 65 and over are entitled to Medicare Part A if they or their spouse are eligible for Social Security payments, and do not have to pay a premium for Part A if they paid payroll taxes for 10 or more years.
If you aren’t eligible for premium-free Part A, you may be able to buy Part A. You’ll pay up to $505 each month in 2024. If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $505. If you paid Medicare taxes for 30–39 quarters, the standard Part A premium is $278.
People under age 65 who receive Social Security Disability Insurance (SSDI) payments generally become eligible for Medicare after a two-year waiting period, while those diagnosed with end-stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS) become eligible for Medicare with no waiting period.
Medicare coverage is based on 3 main factors
- Federal and state laws.
- National coverage decisions are made by Medicare about whether something is covered.
- Local coverage decisions are made by companies in each state that process claims for Medicare. These companies decide whether something is medically necessary and should be covered in their area.
Note: An individual must apply for Social Security 5 months before their 65th birthday; the late enrolment penalty included in part B premium is for life and increases as part B premium increases.
Should I get Parts A & B?
Some people get Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) automatically and other people have to sign up for it. In most cases, it depends on whether you’re getting Social Security benefits.
Most people automatically enroll in Medicare Part A (Hospital Insurance) when they’re first eligible, but certain people may choose to delay Medicare Part B (Medical Insurance). In most cases, it depends on the type of health coverage you may have through your employer.
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| If you’re in a Medicare Advantage Plan or other Medicare plan, your plan may have different rules. But, your plan must give you at least the same coverage as Original Medicare. Some services may only be covered in certain facilities or for patients with certain conditions. |
What’s covered?
Part B covers 2 types of services
- Medically necessary services: Services or supplies that are needed to diagnose or treat your medical condition and that meet accepted standards of medical practice.
- Preventive services: Health care to prevent illness (like the flu) or detect it at an early stage, when treatment is most likely to work best.
You pay nothing for most preventive services if you get the services from a healthcare provider who accepts assignment
. Part B covers things like:
- Clinical research
- Ambulance services
- Durable medical equipment (DME)
- Mental health
- Limited outpatient prescription drugs
2 ways to find out if Medicare covers what you need
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- Talk to your doctor or other healthcare provider about why you need certain services or supplies. Ask if Medicare will cover them. You may need something that’s usually covered but your provider thinks that Medicare won’t cover it in your situation. If so, you’ll have to read and sign a notice. The notice says that you may have to pay for the item, service, or supply.
- Find out if Medicare covers your item, service, or supply.
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The size of the employer determines whether you may be able to delay Part A and Part B without having to pay a penalty if you enroll later.
The employer has fewer than 20 employees.
You should sign up for Part A and Part B when you’re first eligible. In this case, Medicare pays before your other coverage. Learn more about how to get Parts A and B.
Note
If you don’t enroll when you’re first eligible, you may have to pay a Part B late enrollment penalty, and you may have a gap in coverage if you decide you want Part B later.
DONUT HOLE
Most Medicare drug plans have a Coverage Gap (also called the “donut hole”). This means there’s a temporary limit on what the drug plan will cover for drugs. Not everyone will enter the Coverage Gap, and it doesn’t apply to members who get Extra Help to pay for their Part D costs.
In 2020, a person can get out of the Medicare donut hole by meeting their $6,350 out-of-pocket expense requirement. However, there are ways to receive assistance for funding prescription drugs, especially if a person meets certain low-income requirements.
For 2021, the coverage gap begins when the total amount your plan has paid for your drugs reaches $4,130 (up from $4,020 in 2020). At that point, you’re in the doughnut hole, where you’ll now receive a 75% discount on both brand-name and generic drugs.
COBRA
When the employment or employer/union coverage ends
Once the employment (or your employer/union coverage) ends, 3 things happen:
- You may be able to get COBRA coverage, which continues your health insurance through the employer’s plan (in most cases for only 18 months) and probably at a higher cost to you.
- You have 8 months to sign up for Part B without a penalty, whether or not you choose COBRA. To sign up for Part B while you’re employed or during the 8 months after employment ends, complete an Application for Enrollment in Part B (CMS-40B) and a Request for Employment Information (CMS-L564). If you choose COBRA, don’t wait until your COBRA ends to enroll in Part B. If you don’t enroll in Part B during the 8 months after the employment ends:
- You may have to pay a penalty for as long as you have Part B.
- You won’t be able to enroll until January 1–March 31, and you’ll have to wait until July 1 of that year before your coverage begins. This may cause a gap in health care coverage.
- If you already have COBRA coverage when you enroll in Medicare, your COBRA will probably end. If you become eligible for COBRA coverage after you’re already enrolled in Medicare, you must be allowed to take the COBRA coverage. It will always be secondary to Medicare (unless you have . Learn more about how Medicare works with other insurance.
The standard Part B premium amount in 2020 is $144.60. Most people pay the standard Part B premium amount.
Medicare Advantage Plan
A Medicare Advantage Plan (like an HMO or PPO) is offered through the private sector. It’s another Medicare health plan choice you may have as part of Medicare.
Medicare Advantage plans cover services you’d receive under Medicare Parts A and B. Businesses are awarded government contracts to pay for services rendered through parts A, B, C, and D. Anyone who is eligible for original Medicare Parts A and B is eligible for the Medicare Advantage programs in their area.
Medicare Part C covers Part A and Part B, and may also include prescription drug coverage (Part D) and other benefits not available with Original Medicare such as hearing aids, dental, and vision. A Medicare Advantage prescription drug (MAPD) plan is when a Part C and Part D plan are combined. Medicare Part D only covers prescription drugs.
- Centers for Medicare & Medicaid Services (CMS)
The Centers for Medicare & Medicaid Services is a federal agency within the United States Department of Health and Human Services that administers the Medicare program and works in partnership with state governments to administer Medicaid, the Children’s Health Insurance Program (CHIP), and health insurance portability standards.
In addition to these programs, CMS has other responsibilities, including the administrative simplification standards from the Health Insurance Portability and Accountability Act of 1996 (HIPAA), quality standards in long-term care facilities (more commonly referred to as nursing homes) through its survey and certification process, clinical laboratory quality standards under the Clinical Laboratory Improvement Amendments, and oversight of HealthCare.gov.
CMS was previously known as the Health Care Financing Administration (HCFA) until 2001.
CMS is headquartered at 7500 Security Boulevard, Baltimore, MD 21244. It investigates health complaints regarding Quality of Care.–Form 287
References: KFF,
