What is Original Medicare? | SingleCare (2024)

As we work and age, we pay Medicare and Social Security taxes. Most people know what Social Security and Medicare are, but many don’t understand how the Medicare program works. We’re going to give you an overview of Medicare.

We will cover what Medicare is, what’s included in the coverage, and the associated Medicare costs. After that, we’ll discuss what options you can choose regarding how you receive your Medicare benefits. Finally, we’ll give you some ways to save additional money while on Medicare.

What is Original Medicare?

Original Medicare is insurance for Americans that are 65 years old or older. There are some cases when you can enroll in Medicare before you turn 65.

You may be able to receive Medicare benefits before you turn 65 if you have certain health conditions such as Lou Gehrig’s disease or End-Stage-Renal Disease.

You can also enroll in Medicare before age 65 if you have received Social Security Disability Insurance (SSDI) benefits for more than 24 months.

The terms Traditional Medicare and Original Medicare are often used interchangeably, and both refer to the government-administered fee-for-service hospital and medical services portions, or “parts”, of Medicare. There are four parts of Medicare. Generally speaking:

• Medicare Part A is hospital insurance.
• Medicare Part B covers outpatient care and medical services.
• Medicare Part C is an alternative way to receive your Medicare benefits through private insurance plans.
• Medicare Part D is coverage for prescription drugs.

To find out if you have both parts of Original Medicare, you can review your red, white, and blue Medicare card, check online at either Medicare.gov or SSA.gov, or call Medicare or The Social Security Administration If you are enrolled in Medicare Part C or Part D, you will receive separate insurance cards for those programs.

Part A

Medicare Part A covers services that include the following:

• Inpatient hospital care
• Inpatient care in a skilled nursing facility that’s not custodial or long-term care
• Hospice care
• Home health care

Medicare Part A is premium-free for most beneficiaries. As long as you or a spouse worked at least 40 quarters (ten years) throughout your lifetime, you’ll receive Medicare Part A at no monthly cost.

If you worked less than 40 quarters, you might still be able to receive Medicare Part A, but you’ll pay a monthly premium of either $278 or $506 each month (2023), depending on your work history.

Your premium will depend on how long you or a spouse worked and paid into Medicare taxes.

You also have other costs associated with Medicare Part A (2023):

Hospital Stay:

• $1,600 deductible for each benefit period
• $0 for the first 60 days of inpatient hospital care per benefit period
• $400 per day for days 61–90 of inpatient hospital care per benefit period
• $800 per lifetime reserve day.
  • After day 90 of inpatient care per benefit period (Medicare enrollees have a maximum of 60 reserve days in their lifetime)

Skilled Nursing Facility stay:

• $0 for the first 20 days of inpatient SNF care per benefit period
• $200 per day for days 21–100 of inpatient SNF care per benefit period
• All costs for each day after day 100 of inpatient SNF care in the benefit period

A benefit period measures your use of a hospital or SNF. A benefit period begins the first day that you are admitted to a hospital or SNF and ends when you have not received inpatient care for 60 days in a row. If you go and receive inpatient care after a benefit period, a new benefit period will begin. The costs above may vary if you have a Medigap plan, Medicare Savings Program, or Medicaid.

Part B

Medicare Part B covers the following:

• Doctor Visits
• Preventive Services
• Outpatient Services
• Diagnostic Laboratory Tests
• Durable Medical Equipment
• Drugs Administered in the physician’s office
• Outpatient surgeries
• Outpatient Imaging tests: X-rays, M.R.I.s, CT Scans, Ultrasounds, etc.

The monthly premium (2023) for Medicare Part B for most beneficiaries is $164.90. The monthly premium may be higher depending on your reported income from 2 years prior.

In addition to the premium, there are additional costs when using Medicare Part B.

• $226 annual Medicare Part B deductible
• 20% coinsurance if your doctor accepts Medicare assignment
• 15% excess charges above Medicare’s approved amount if your doctor not not accept Medicare assignment

Once you meet the Medicare Part B deductible, Medicare will pay 80% of the Medicare-approved amount, leaving you with 20% coinsurance.

Some healthcare providers don’t accept Medicare assignments in these cases and can charge you an additional 15% above the Medicare-approved amount.

Medicare beneficiaries may enroll in Medicare supplemental insurance (Medigap) or a to help cover the out-of-pocket cost-sharing associated with Original Medicare.

What is not covered

For healthcare services and procedures to be covered by Original Medicare, they must be considered medically necessary. In addition to being medically necessary, the procedures must be approved by the F.D.A. Some items that Original Medicare doesn’t cover will include:

• Routine dental coverage
• Vision coverage
• Hearing aids
• Cosmetic surgery
• Prescription drug coverage

Prescription drug coverage is available through Medicare Parts C or with a Medicare Part D plan.

Original Medicare vs. Medicare Advantage

As mentioned above, Medicare Advantage plans (Medicare Part C) are an alternative way to receive your Medicare benefits.

These private health insurance plans must cover the same benefits as Original Medicare, and the coverage must be as good or better than Original Medicare.

These plans are regulated by the Centers for Medicare & Medicaid Services and are administered by private insurance companies.

Medicare Advantage plans typically won’t simply include the Medicare Part A and Medicare Part B benefits. They frequently will include prescription drug coverage and possibly some extra benefits not covered by Original Medicare.

Medicare Advantage plans will differ depending on where you live and which insurance company you choose.

If you are unsure about which program may best meet your needs, call 1-800-MEDICARE or seek out a state health insurance assistance program, area agency, or nonprofit that specializes in Medicare.

The costs associated with a Medicare Advantage plan can vary as well. There is typically a low and, in some cases, $0 monthly premium. There will be fixed, predictable copays for most services.

As you can see above, enrolling in Medicare Part C over Original Medicare may have some advantages. An additional benefit is unlike Original Medicare, Medicare Part C plans have a limit on out-of-pocket costs.

However, there are also drawbacks such as potential denial of care, a limited network of healthcare providers, a prior approval requisite for services, and Original Medicare no longer administering your healthcare benefits.

How to save money on Medicare-related costs

Medicare may still be expensive and there are many programs that can help with cost-sharing.

For those beneficiaries with low income, you can look into the Low-income Subsidy Program or Extra Help.

This program assists with the costs of prescription drug plan premiums, deductibles, copays, and coinsurance.

In addition to extra help, a Medicare Savings Program can assist low-income Medicare beneficiaries with help paying for their Original Medicare premiums, deductibles, copays, and coinsurance for medical services.

The Senior Savings Model is a relatively new system that helps Medicare beneficiaries with insulin-dependent diabetes. This system makes it so select insulins can’t cost more than $35 for prescription drug costs.

Other ways to save on prescription drug costs include discount cards like SingleCare. These discount programs have no fees and provide a free discount card to use for savings on prescriptions. You can sign up online and start saving right away.

Just email, text, or download a copy of your drug savings card and head to your local pharmacy.