Medicare

Part A covers inpatient hospital stays, skilled nursing facility care after a qualifying hospital stay, hospice and some home health care. People who paid Medicare taxes for enough working quarters pay no monthly premium for Part A; others can buy it. It carries a deductible per benefit period rather than per year, and a long stay moves into daily coinsurance once the covered days in a benefit period are used, so separate hospitalisations can trigger the deductible more than once in a year.

Part B covers doctor visits, outpatient care, durable medical equipment, preventive services, lab work and drugs given in a clinic. It has a monthly premium, deducted from Social Security for most enrollees, that rises with income above thresholds the government resets each year, and an annual deductible after which Medicare pays its share of the approved amount and you pay the rest. Providers who accept assignment agree to the approved amount; those who do not can bill a limited excess charge, which is one of the things Medigap letters differ on.

A Medicare Advantage plan is offered by a private insurer under contract with Medicare and covers everything Parts A and B cover, usually with Part D bundled in and often with extras such as dental, vision or a fitness benefit. In exchange it uses a network, typically an HMO or PPO, and its own copays, and it sets an annual out-of-pocket maximum that Original Medicare lacks. Plans, networks and benefits change every year and vary by county. A plan that suits you is one whose network includes your doctors and whose formulary includes your prescriptions; we check both before recommending one.

Part D is drug coverage from private plans, either standalone next to Original Medicare or built into an Advantage plan. Each plan has a formulary, tiers that set the copay for each drug, a deductible in some plans, and pharmacy networks with preferred and standard pricing. Federal rules cap what an enrollee pays out of pocket for covered drugs in a year, and the cap and the phases beneath it are reset annually. Going without creditable drug coverage after first becoming eligible adds a late enrollment penalty to the premium for as long as you have Part D, which is why we ask about drug coverage even from people who take nothing today.

A Medigap policy is sold by a private insurer to pay the deductibles, coinsurance and copays that Original Medicare leaves behind. Plans are standardised by letter, so a given letter pays the same benefits from any insurer, and the differences are price, rate-increase history and household discounts. Medigap has no network: any provider that accepts Medicare accepts it, in any state, which is why frequent travellers and people with doctors in more than one city often prefer this route. The trade is a monthly premium on top of Part B, paid every year, against low and predictable costs when care is needed.

Medicare has several enrollment windows, and which one you are in decides what you can do. The initial enrollment period surrounds the month you first become eligible. The general enrollment period, each year, is for people who missed the initial one, and it can carry a Part B late penalty that lasts as long as you have Part B. The annual election period, each autumn, is when anyone can change Advantage or Part D plans for the following year, and a separate Advantage open enrollment period early in the year allows one change for people already in an Advantage plan. Special enrollment periods open after events such as losing employer coverage or moving out of a plan's service area.

Medigap has its own rule: a one-time open enrollment window tied to Part B enrollment in which an insurer accepts you regardless of health, after which medical underwriting applies in most states.