Medicare / Long-Term Care

Medicare Part A covers the following services:

Inpatient hospital care: This is care received after you are formally admitted into a hospital by a physician. You are covered for up to 90 days each benefit period in a general hospital, plus 60 lifetime reserve days. Medicare also covers up to 190 lifetime days in a Medicare-certified psychiatric hospital.
Skilled nursing facility (SNF) care: Medicare covers room, board, and a range of services provided in a SNF, including administration of medications, tube feedings, and wound care. You are covered for up to 100 days each benefit period if you qualify for coverage. To qualify, you must have spent at least three consecutive days as a hospital inpatient within 30 days of admission to the SNF, and need skilled nursing or therapy services.
Home health care: Medicare covers services in your home if you are homebound and need skilled care. You are covered for up to 100 days of daily care or an unlimited amount of intermittent care. To qualify for Part A coverage, you must have spent at least three consecutive days as a hospital inpatient within 14 days of receiving home health care.
Hospice care: This is care you may elect to receive if a provider determines you are terminally ill. You are covered for as long as your provider certifies you need care.

Keep in mind that Medicare does not usually pay the full cost of your care, and you will likely be responsible for some portion of the cost-sharing (deductibles, coinsurances, copayments) for Medicare-covered services.

Most people do not pay a monthly Part A premium because they or a spouse have 40 or more quarters of Medicare-covered employment. In 2023, if a person has less than 30 quarters of Medicare-covered employment the Part A premium is $506 per month. If a person has 30 to 39 quarters of Medicare-covered employment, the Part A premium is $278 per month.

Medicare Part B provides outpatient/medical coverage. The list below provides a summary of Part B-covered services and coverage rules:

Provider services: Medically necessary services you receive from a licensed health professional.
Durable medical equipment (DME): This is equipment that serves a medical purpose, is able to withstand repeated use, and is appropriate for use in the home. Examples include walkers, wheelchairs, and oxygen tanks. You may purchase or rent DME from a Medicare-approved supplier after your provider certifies you need it.
Home health services: Services covered if you are homebound and need skilled nursing or therapy care.
Ambulance services: This is emergency transportation, typically to and from hospitals. Coverage for non-emergency ambulance/ambulette transportation is limited to situations in which there is no safe alternative transportation available, and where the transportation is medically necessary.
Preventive services: These are screenings and counseling intended to prevent illness, detect conditions, and keep you healthy. In most cases, preventive care is covered by Medicare with no coinsurance.
Therapy services: These are outpatient physical, speech, and occupational therapy services provided by a Medicare-certified therapist.
Mental health services.
X-rays and lab tests.
Chiropractic care when manipulation of the spine is medically necessary to fix a subluxation of the spine (when one or more of the bones of the spine move out of position).
Select prescription drugs, including immunosuppressant drugs, some anti-cancer drugs, some anti-emetic drugs, some dialysis drugs, and drugs that are typically administered by a physician.

This list includes commonly covered services and items, but it is not a complete list. Keep in mind that Medicare does not usually pay the full cost of your care, and you will likely be responsible for some portion of the cost-sharing (deductibles, coinsurances, copayments) for Medicare-covered services.

The 2023 Part-B premium is $164.90 per month (premiums will be higher for individuals with annual incomes of $97,000 or more and married couples with annual incomes of $194,000 or more.)

Medicare Advantage Plans.

You can choose to get your Medicare coverage through a Medicare Advantage Plan (Part C) instead of through Original Medicare Parts A & B.

Medicare Advantage Plans must offer, at minimum, the same benefits as Original Medicare (those covered under Parts A and B) but can do so with different rules, costs, and coverage restrictions. You also typically get Part D as part of your Medicare Advantage benefits package (MAPD). Many different kinds of Medicare Advantage Plans are available. You may pay a monthly premium for this coverage, in addition to your Part B premium.

If you join a Medicare Advantage Plan, you will not use the red, white, and blue Medicare card when you go to the doctor or hospital. Instead, you will use the membership card your private plan sends you to get health services covered. You will also use this card at the pharmacy if your health plan has Medicare prescription drug coverage (Part D).

Medicare Advantage plans can be full of extra benefits like prescription drug coverage, dental, hearing, and vision coverage. Another advantage of a Medicare Advantage plan is a mandatory out-of-pocket maximum. A possible disadvantage of a Medicare Advantage plan is you can’t have a Medicare Supplement plan with it.
Between 2019 and 2023, Medicare Advantage enrollment has grown by 2.1 percent. As of January 2023, 48 percentof all Medicare beneficiaries are enrolled in Medicare Advantage, translating to 30.7 million people. Medicare Advantage enrollment growth continued at a rapid pace, adding 2.7 million beneficiaries in 2023.
While Medicare Advantage can be a cheaper alternative to getting Plans A, B and D separately, it also comes with geographical and network restrictions and, sometimes, surprise out-of-pocket costs.

Prescription Drug Coverage.

Medicare’s prescription drug benefit (Part D) is the part of Medicare that provides outpatient drug coverage. Part D is provided only through private insurance companies that have contracts with the federal government—it is never provided directly by the government (unlike Original Medicare). If you want to get Part D coverage, you have to choose and enroll in a private Medicare prescription drug plan (PDP) or a Medicare Advantage Plan with drug coverage (MAPD). Enrollment is optional (though recommended to avoid incurring future penalties) and only allowed during approved enrollment periods. Typically, you should sign up for Part D when you first become eligible to enroll in Medicare. Whether you should sign up for a Medicare Part D plan depends on your circumstances. You may have creditable drug coverage from employer or retiree insurance. If so, you don’t need to enroll in a PDP until you lose this coverage. Also, some people already enrolled in certain low-income assistance programs may be automatically enrolled in a Medicare drug plan and receive additional financial assistance paying for their medicines.

What is a Medicare Supplement Plan?

Medicare Supplement Plans are health insurance policies that offer standardized benefits to work with Original Medicare (not with Medicare Advantage). They are sold by private insurance companies. If you have a supplement plan, it pays part or all of certain remaining costs after Original Medicare pays first. These plans may cover outstanding deductibles, coinsurance, and copayments and may also cover health care costs that Medicare does not cover at all, like care received when traveling abroad. Remember, Medicare Supplement Plans only work with Original Medicare. If you have a Medicare Advantage Plan, you cannot buy a Medicare Supplement Plan. Depending on where you live, you have up to 10 different Medicare Supplement policies to choose from: A, B, C, D, F, G, K, L, M, and N (policies in Wisconsin, Massachusetts, and Minnesota have different names). Each policy offers a different set of standardized benefits, meaning that policies with the same letter name offer the same benefits. However, premiums can vary from company to company.

If you’re a higher-income beneficiary, you’ll pay a larger percentage of the total cost of Part B based on the income you report to the Internal Revenue Service (IRS). You’ll pay monthly Part B premiums equal to 35, 50, 65, 80, or 85 percent of the total cost, depending on what you report to the IRS.

There’s the additional 0.9% tax on income above $200,000 for individual filers and $250,000 for joint filers, and the 3.8% tax on investment income of more than $200,000/individual and $250,000/joint. Once you turn 65, you can sign up for Medicare no matter how rich you are.

An estimated 7% of Medicare’s 64.3 million beneficiaries end up paying income-related monthly adjustment amounts, or IRMAAs, in addition to their Medicare premiums.
There are strategies available that can help you avoid those monthly surcharges or minimize them.

- High-Deductible Health Plan (HDHP) and Health Savings Accounts (HSA)
- Draw funds from Tax Exempt (Roth IRA, Roth 401(k), or IUL) only as needed