What is Original Medicare?
What is Original Medicare? What is Part A? What is Part B of Medicare? Follow me as I cover the basics of what Original Medicare is and how most clients add to this foundation to protect themselves from being subject to very expensive out-of-pocket costs. The most common example, keeping your Original Medicare as primary insurance under Medicare and adding a Medicare Supplement Plan and a Medicare Prescription Drug Plan. You will want to keep Medicare Part A and Medicare Part B primary if you want access to all Medicare physicians and providers that accept Medicare assignment. You may then add a Medicare Supplement Plan as secondary insurance policy to pick up deductibles and co-insurance that Original Medicare does not cover for Medicare approved medical/hospital procedures/services. In addition, you may add a Part D or Medicare Prescription Drug Plan to Original Medicare to complete your health coverage.
What is Part A of Original Medicare?
Think of Hospital Insurance – Part A of your Medicare as the insurance coverage for “room and board” and general care services. Most medical services (through doctors), even while in the hospital, will likely fall under Part B of Medicare.
Original Medicare is not primary in a Medicare Advantage Plan
In the case you enroll in a Medicare Advantage Plan, your Original Medicare will be, in fact, signed over to the private insurance companies Medicare Advantage Plan or Part C plan. Although they are required to provide you with the same benefits as Original Medicare, it will not be primary. Therefore, you’ll be subject to seeing their “network” of physicians and providers (i.e. HMO Part C plan). You will no longer be able to ask, “do you accept Medicare?” Rather, you’ll be subject to asking, “do you accept my Medicare Advantage Plan X, not Medicare Advantage as a general plan type.
For more information on Medicare Supplements and Medicare Advantage Plans, review Medicare Video Library within the Medicare Toolbox at the top of this page and/or Medicare 101, to cover the basics of each “part” and “plan.” This is good place to start learning how they can provide you with more Medicare insurance coverage.
What is Original Medicare Part A?
What is the Part A hospital coverage? Part A covers inpatient care in hospitals, skilled nursing care, hospice care, and home health care. Typically, “premium free- $0” if you paid (were taxed) into the Medicare system for 10 years or 40 quarters. You may receive credit for Part A through a spouse as well.
Part A covers inpatient hospital care when all of these are true:
- You’re admitted to the hospital as an inpatient after an official doctor’s order, which says you need inpatient hospital care to treat your illness or injury.
- The hospital accepts Medicare.
- In certain cases, the Utilization Review Committee of the hospital approves your stay while you’re in the hospital.
What are the Part A costs (w/o a Medicare Supplement or Advantage Plan)?
- $1,632 (2024) is the Part A deductible for each benefit period. This benefit period begins the first day you’re admitted as an inpatient in a hospital or a skilled nursing facility. This benefit period ends when you haven’t received any inpatient care or skilled nursing care for 60 days in a row. Medicare doesn’t make this very clear, but if you were to return to inpatient care before 60 days of leaving the facility, “that same benefit period” would continue and the following per day amounts would apply.
- Days 1–60: $0 no co-insurance (Part A deductible picks up the first 60 days).
- Days 61–90: $408 (2024) coinsurance per day of each benefit period.
- Days 91 and beyond: $816 (2024) coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime).
- Beyond lifetime reserve days: All costs.
Inpatient mental health care in a psychiatric hospital is limited to 190 days in a lifetime.
Mentor One Insight
Medicare Supplement Plans G, N, and F* (*F if grandfathered, aka. enrolled in Medicare prior to 01/01/2020) would all cover this Part A deductible as well as the per day amounts in each per day breakdown of costs. If you have one of these 3 Medicare Supplement Plan letters from any insurance company (since they are all standardized), the Part A deductible will be covered and you do not need to worry about these out of pocket costs. Plan G, N, F* along with all Medicare Supplement plans will cover you up to an additional 365 days after Medicare benefits are used (Choosing a Medigap Policy-CMS 2023). I only note Plan G, N, and F because in my opinion these are the only 3 plans that make any sense to add to your Medicare if you look at the price compared to the value of coverage when viewing all Medicare Supplement Plans. View Medicare Supplement Plans under Medicare 101.
Medicare Advantage Plans are all structured differently, so it’s not possible to say how these per days costs would be covered or provide you with an estimate of your out-of-pocket costs under this type of plan (usually a flat fee of a few hundred- varying copays for longer stays). With that said, your Part A out-of-pocket costs would be substantially less having a Medicare Advantage Plan through a private insurance company that helps cover these costs as opposed to having Part A on its own with no additional Medicare insurance coverage.
Think of Part A as the foundation of Medicare insurance for anything in a hospital or skilled nursing facility (think “room and board” to simply the coverage). As indicated above, Part A has deductibles and copays for various “per day” amounts for inpatient stays. However, you have the option of insuring these deductibles and copays with additional insurance coverage (Medicare Supplement Plan or moving over to a Medicare Advantage Plan).
It is very rare for someone not to have an additional Medicare Supplement Plan for additional coverage or sign over their Medicare to a Medicare Advantage Plan to provide them with more coverage than what the basic Part A provides unless they are dual eligible for Medi/Medi (Medicare/Medi-Cal). This is a low income program. Please contact your local county office if you think you may qualify based on your income. If you happen to qualify, we can present you with dual eligible Medicare Advantage Plans or discuss a “spend down” which your Medi-Cal case worker should outline for you if you’re not eligible for Medi-Cal $0 share of cost.
What is Part A of Original Medicare covered hospital stay?
Medicare-covered hospital services include:
- Semi-private rooms (Private rooms are not covered unless medically necessary)
- Meals
- General nursing
- Drugs as part of your inpatient treatment (including methadone to treat an opioid use disorder)
- Other hospital services and supplies as part of your inpatient treatment
What is the Part A Penalty?
What is the Part A penalty? Well, if you qualify for your 40 quarters (you or spouse), you will not be subject to the Part A penalty. In rare circumstances, you may not have fulfilled your Part A requirement of 40 quarters or 10 years, and therefore, must pay all or a portion of the Part A premium to receive hospital coverage. Again, if you don’t qualify for 40 quarters, you may qualify through your spouse.
If you do not qualify for Part A and are subject to pay a portion of the premium and did not take it when first eligible, you may be subject to a penalty. Contact your local Social Security Administration to review your account if you feel you may be subject to the Part A penalty.
Mentor One Insight
Medicare.gov says, “If you also have Part B”, it generally covers 80% of the Medicare-approved amount for doctor’s services you get while you’re in a hospital. This is true. Part B does cover 80% of physician’s services while in the hospital under Part B (Medical Insurance). However, Medicare words this as if adding Part B is something you may just decide to add it-…it’s necessary if your intent is to use Medicare as your primary health insurance (aka Medicare as the primary payor of insurance). In fact, the majority of medical costs do fall under Part B while in the hospital. You want to have both Part A and Part B of your Medicare.
I have yet to see a client that has only Part A and not Part B unless they made a critical error of not enrolling properly in their open enrollment window when turning 65, or have creditable coverage through an employer group plan while still working. I have seen Medicare beneficiaries who delay Part B because they are currently working (or spouse) and receive a “Part A Only” Medicare card. Although these beneficiaries receive the Part A Only Medicare card, it’s very likely they have an employer group sponsored health plan (or through their spouse) which is primary to Medicare (in groups over 20 employees). Therefore, Part A is merely “waiting on the sidelines” until Part B is activated through a Special Election Period (SEP) once they leave the employer group plan coverage and Medicare Part A & B become primary.
Now what about that remaining 20% Medicare mentions you may be responsible for? Well, let’s look at Part B next. Think “physician services”.
Note: Don’t think of Medicare Part A and B separately when you are in a hospital as an inpatient. If you have Part A & B with a Medicare Supplement Plan or choose to go with a Medicare Advantage Plan, there’s no reason to worry about what procedure or service is categorized under what “Part” of Medicare. If you have either product, you must have Part A & B to be enrolled. Thus, focus on what your insurance plan’s coverage states for the medical procedure or per day costs in the hospital, Not Part A & B alone.
What is Original Medicare Part B?
Part B covers physician services, outpatient care, home health care, durable medical supplies (DME), and preventative services.
Part B covers 2 types of services Medicare.gov:
Medically necessary services: Services or supplies that are needed to diagnose or treat your medical condition and the meet the accepted standards of medical practice.
Preventative services: Health care to prevent illness (like the flu) or detect it at an early age, when treatment is most likely to work best.
Preventative services are covered under Part B of Medicare when the service is done by a physicians or provider that accepts Medicare Assignment (aka. accepts Medicare payment).
Part B covers: clinical research, ambulance services, durable medical supplies, mental health, and limited outpatient prescription drugs
2024 Standard Part B deductible – $174.70 (Subject to IRMAA tiers with higher income).
Mentor One Insight
Think of Part B as the foundation of insurance for anything in a physician’s office or outpatient facility (primary or specialist). Other examples include physical therapy, chiropractic services, diabetic supplies, CPAP equipment (aka durable medical equipment or DME). Part B covers 80% of these services after a deductible. Part B has an annual deductible of $240 (2024). After this deductible is paid in the calendar year, you would then be responsible for the remaining 20%, however, most clients insure this 20% with additional Medicare coverage through an insurance carrier (ie. Medicare Supplement Plan or move over to a Medicare Advantage Plan).
Medicare Advantage Plan – this doesn’t add to Original Medicare Parts A & B like many companies “frame” this product to you. This product is a private heath insurance plan designed for Medicare health coverage that is in essence, substituting Medicare over to an “alternative” plan consisting of a network of providers and facilities (aka Part C). If you enroll in this style of plan, you are in fact signing over your Medicare to that specific Medicare Advantage plan’s network (ie. HMO/PPO network). See more details on how Medicare Supplement Plans or Medicare Advantage Plans work to provide additional coverage. I recommend reviewing the Medicare 101 section under each plan type as well as the Medicare Map for a visual confirmation of how the plans can help cover your Medicare medical expenses.
Part B coverage:
Your Responsibility:
You’re responsible for the 20% with no set max unless you choose to insure the 20% with a Medicare Supplement Plan or sign over Medicare to A Medicare Advantage Plan (which will have a different payment structure with an Out of pocket max.
Mentor One Insight
Medicare Supplement
If you choose to insure this 20% with a Medicare Supplement (which I highly recommend), Plan G, N**, and F* (if grandfathered prior to January 1, 2020*) you will have this 20% covered. The remaining 20% may not seem like a lot, but when you consider a potential accident or procedure that requires surgery, MRI, CT scan, DME, outpatient rehab, physical therapy, and follow up testing/appointments, 20% could easily reach tens of thousands of dollars very quickly– if not more for a major cardiac surgery and rehabilitation. Plan G— the entire 20% is covered other than an annual Part B deductible of $240 in 2024. Plan N**– in the case of Plan N (which is a good option other than G if needing a lower monthly plan premium) you would have the full 20% coverage after a Part B deductible of $240 similar to Plan G, but you would first have a copayment of $20 for office visits/$50 for emergency room visits that don’t result in inpatient admission. Again, both Medicare Supplement Plan G and Medicare Supplement Plan N are subject to the annual Part B deductible– $240 for 2024.
Medicare Advantage
If you are wondering whether a Medicare Advantage Plan would pick up the 20%, the answer is complicated, but no not all of it. The way the plans are structured, the typical 80/20% split that Medicare Part B and a Medicare Supplement Plans breakdown would not apply. Rather, the Medicare Advantage Plan is a plan that is designed by insurance companies who structure the plan to mimic Original Medicare coverage with additional coverage, not the standard 80/20% split. Medicare Advantage Plans structure cost differently. Similar to individual health plans that have copays and co-insurance specific to each category of a medical service or procedure. Think of the plan breaking down each procedure or appointment into their own individual copays/co-insurance sections. So, you may have a copay for the surgery, the MRI, DME, the outpatient rehab appointments as well as copays for each follow up appointment and possibly more diagnostic testing. This is likely what you’re used to with an employer plan, however, the employer plan likely provides more coverage than a basic Medicare Advantage Plan and it also, likely provides a larger network of physicians than a Medicare Advantage Plan.
Remember, these plan have lower premiums, but tend to have much higher variable out-of-pocket expenses (copays/co-insurance). These plans do set a maximum or OOP Max (out-of-pocket mac). Typically these range between $4,000 to $10,000+ annually. Again, they are all variable so the only way to know is to look up the plans with your ZIP Code and find out. If you call me with questions, I can easily clarify this with you. It’s impossible to give definite answers with Medicare Advantage plans unless we are looking at each plan, one at a time that accepts your primary doctor and is available in your area.
What is the Part B premium?
The monthly Part B premium in 2024 is $174.70 and up (2024 figures – 103k single or 206k- modified adjusted gross income married filing a joint tax return will be more than standard premium of $174.70). See IRMAA Part B & D Surcharges. This is most often deducted from your Social Security check (or Railroad Retirement Board) monthly if you’re already receiving Social Security or RRB benefits. This can also be paid directly to Social Security if you’re deferring your retirement benefit until a later age (ie. 66-70).
If deferring, this will typically be billed quarterly, but you can set this up for a monthly billing EFT or credit card with the Social Security office once you receive your first mailed quarterly statement. If you think you’re above the standard Part B income limits for 2024, you will be charged more for Part B and Part D. This is called the Income-Related Monthly Adjustment Amount or (IRMAA). There is an additional premium (surcharge) applied to both your Medicare Part B as well as the Medicare Part D prescription plans.
What is Part B of Original Medicare?
Think of Medical Insurance or Part B of Original Medicare as the outpatient care you receive in physician’s office or outpatient facility. This is most often referred to as the “80/20 split”, and is where most of the medical procedures and services are covered when using Medicare.
What is the Part B IRMAA?
What is IRMAA? Unfortunately, it means you (or you and your spouse if filled jointly) have an income above the standard limits set by Social Security for the standard Part B premium. IRMAA applies to Medicare beneficiaries who earn over $103,000 or $206,000 married filled jointly and are enrolled in Part B and/or enrolled in Part D Medicare prescription plans. The limits increase with income and are broken down into 5 income brackets ranging from $244.60 for to $594 for the higher income earners in the highest bracket (2024).
IRMAA is calculated on the your Modified Adjusted Gross Income from 2 years prior. So, if you fall in this category, take a look at your 2022 MAGI to see where it falls. The Part B IRMAA income brackets with applicable surcharges for 2024 are presented below in Table 1.1. For more information on IRMAA surcharges–see more on IRMAA Part B & D Surcharges.
Part B IRMAA Calculations. Table 1.1 (2024).
| Individual | Filled Joint Return | Monthly Part B Premium + IRMAA |
|---|---|---|
| $103,000 or less | $206,000 or less | $174.70 |
| > $103,000 to $129,000 | > $206,000 to $258,000 | Part B + IRMAA = $244.60 |
| > $129,000 to $161,000 | > $258,000 to $322,000 | Part B + IRMAA = $349.40 |
| > $161,000 to $193,000 | > $322,000 to $386,000 | Part B + IRMAA = $554.20 |
| > $193,000 to $500,000 | > $386,000 to $750,000 | Part B + IRMAA = $559.00 |
| Greater than $500,000 | Greater than $750,000 | Part B + IRMAA = $594.00 |
Mentor One Insight
How to Appeal IRMAA?
Filing a Redetermination – If you find yourself being charged for IRMAA, you have the option of filing a redetermination if you believe that your calculation is not accurate for your income two years prior to your year’s IRMAA charge (See Form SSA-44 under the Resources tab). If you disagree with the filing, you may file third level appeal through the office- Decision by Office of Medicare Hearing and Appeals.
Did you recently have a Life Changing Event? You may also refile your IRMAA to be redetermined based off a life changing event such as a loss of income or divorce, etc. Use Social Security Form – SSA-44 to refile your IRMAA determination.
Form SSA-44 is located under Medicare Forms & Documents under the Resources tab of the navigation bar.
Considering your IRMAA is based off calculations from two years prior, be sure to update your IRMAA with SSA. Simply updating your figure can drastically reduce your IRMAA charge if you had a large lump sum payment/bonus in recent years. Have any of the following events taken place that would affect your IRMAA?
– Home Sale or sale of property?
– Large investment distribution?
– Income reduction due to retirement or another life changing event?
If so, refile to keep your IRMAA accurate to avoid any surcharges that you may not need to pay. Going through the process will not only keep your records up to date, but you’ll be more informed on the process if you have future events that could affect your IRMAA.
Need more information? View more on IRMAA Part B & D Surcharges.
Abdominal aortic aneurysm screening
Alcohol misuse screening
Bone mass measurements
Cardiovascular disease screenings
Cervical & vaginal Cancer screening
Colorectal cancer screenings
Depression screening
Diabetes screenings
Flu shots
Glaucoma tests
Hepatitis B shots
Hepatitis B Virus screening
Hepatitis C screening
HIV screening
Lung Cancer screening
Mammogram screening
Nutrition therapy services
Obesity screening & counseling
” Welcome to Medicare” preventative visit
Pneumococcal shots
Prostate cancer screening
Sexually transmitted infection screening
Tobacco use cessation counseling
Yearly “Wellness Visit”
All of these preventative services are included in your Part B of Medicare if you choose to keep Original Medicare as your primary payor OR your the equivalent of Original Medicare in a Medicare Advantage Plan if you decided to sign over your Medicare to an insurance carrier offering a Medicare Advantage Plan in your county.
These preventative services might be structured in a different way under the Advantage plan’s summary of benefits, but the core of Medicare benefits in Part A & B should be reflected in the coverage/benefits of the Medicare Advantage product with any carrier (as good if not better than the basic coverage outlined by Part A & B of Original Medicare).
If you did not enroll in Part B when you first were eligible and do not have credible coverage (such as an employer group health plan), you may be subject to a late enrollment penalty. This is not a common, but it’s important to avoid.
The Part B penalty is 10% of the Part B premium per year and each year (12 months) you’re not enrolled. The penalty would be added to the standard Part B premium of $174.70 for 2024 if you were to have a penalty applied. Follow the 5 Step Medicare Enrollment Guide and this will never be an issue for you!
If you’re already taking Social Security benefits, then you don’t need to worry about this since Part A & B will be automatically coordinated with Social Security and you’ll receive your cards 3-4 months prior to your 65th birthday.
If you are delaying your Social Security benefit, you’ll want to be sure to proactively enroll yourself into Part B (up to 3 months before 65th birthday month). This would be the window called the “Initial Enrollment Period” which spans a 7 month period- 3 months before your birthday month, birthday month, and the 3 months after. The majority of clients enroll with the IEP prior to their 65th birthday or use Special Election Period (SEP) forms when leaving their employer group health plan at a retirement date over the age of 65 (both scenarios avoid the Part B penalty).
IEP– you enrolled before the penalty could apply- ie. pre 65 enrollment 7 months surrounding your 65th birthday month (3 before, the month of, 3 months after).
SEP– you had credible coverage through an employer group plan while you or your spouse was/is working and transition to Medicare from the group plan. See Medicare Enrollment Scenarios for more information on using the SEP Medicare enrollment after the age of 65 outside the IEP window.
What is the Part A penalty? If you are in a position where you have to buy Part A and did not do so, you may be subject to a penalty. Contact your local Social Security office is you have questions about being subject to a Part A penalty.
Review the Part D penalty information under Medicare 101 – Medicare Prescription Drug plan (Part D).
