Original Medicare (Part A & Part B)

Maybe you’ve heard some information about Original Medicare from friends and family but what exactly is Original Medicare anyway? How does original Medicare fit within Medicare benefits? We consolidated and simplified all the important details for you by answering common questions to help save you time, money and energy!

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What is Original Medicare?

Original Medicare is comprised of two types of government insurance which are;

• Part A – Hospital Insurance
• Part B – Medical Insurance

Medicare coverage plays a significant role in the lives of 40 million Americans and growing at 10k per day! That is about 15% of the U.S. population enrolled in Medicare. Medicare is made up of both public and private sectors. Most seniors do not realize they really only have 2 packages to choose from once they become 65yrs. or when they decide to retire.

“But we know, as President Roosevelt knew and said 30 years ago, that this structure is not yet complete. It will continue to grow as our needs grow–a living monument to the American ideal of health, prosperity, and happiness for all. – Lyndon B. Johnson

One of those packages is Original Medicare the other is Medicare Advantage. Original Medicare is managed by the government and covers approx. 80% of health care costs. Most all working Americans pay into Medicare through FICA taxes issued by Social Security. Part A and Part B is split between hospital and physician coverage but does not contain a drug plan or supplemental insurance which are purchased separately through private insurance carriers. Original Medicare offers enrollees more freedom of coverage than Medicare Advantage because it is not run like an Health Maintenance Organization (HMO) network. Let’s further explain Original Medicare in more details starting with a quick recap of previous chapters.

What is Original Medicare Part A?

Medicare Part A Insurance is government provided Hospital Insurance which is usually granted free and automatically, the first day of the month when an individual turns 65 years of age (called; Premium-free Part A) unless one has not received a full 40 credits from Social Security in which case, Part A would need to purchased.

late enrollment in Medicare Part A will incur a *10% penalty per year. Seniors who are 65 but not officially “retired” may still be covered by their group plan and need to reference their special enrollment period guidelines and current health plan when getting started with Medicare Insurance.

What does Original Medicare Part A cover?

Generally, Medicare Part A coverage includes;

• Hospital care
• Skilled nursing facility care
• Nursing home care (as long as custodial care isn’t the only care you need)
• Hospice
• Home health services

If you would like more information about Part A, we dedicated a page called; Medicare Part A Hospital Insurance.

What does Original Medicare Part A not cover?

Medicare Part A does not cover;

• Part B Coverage
• Part D Drug Plan
• Supplement Insurance
• Long Term Care, Dental, Vision, Hearing, Critical Illness (cancer heart attack and stroke coverage) and cosmetic surgery.

What is Original Medicare Part B?

Medicare Part B is government provided Medical Insurance that is commonly paid for every month regardless if you have “full” social security benefits (called the; Standard Monthly Premium). Part B is provided automatically upon Part A enrollment and is normally dedicated from the enrollees social security check. Note, late enrollment in Medicare Part B will incur a *10% penalty per year penalty. Some Medigap Plans cover the Part B deductible (Plan C and Plan F and High-Deductible Plan F but it only available to those who have enrolled in Medicare before Jan 1, 2020.) After Jan. 1 2020, no Medigap Plans will offer 100% Part B deductible coverage. For those enrolled after the cut off date, your next Best Medicare Supplement Plan for 2020 is Plan G

What does Original Medicare Part B cover?

Generally, Medicare Part B covers two (2) types of services;

• Medically necessary services: Services and/or supplies that are needed to diagnose or treat your medical condition. They must meet accepted standards of medical practice.
• Preventive services: Healthcare to prevent illnesses (such as the flu) or detect it at an early-stage, when treatment is most likely to work best in each case.

If you would like more information about Part B, we dedicated a page called; Medicare Part B Medical Insurance.

What does Original Medicare Part B not cover?

Medicare Part B does not cover;

• Part A Coverage
• Part D Drug Plan
• Supplement Insurance
• Long Term Care, Dental, Vision, Hearing, Critical Illness (cancer heart attack and stroke coverage) and cosmetic surgery.

How does Original Medicare compare with Medicare Advantage (Part C)?

Original Medicare may offer more comprehensive coverage when paired with a Part D drug plan and Medigap Plan. Comparing Original Medicare vs Medicare Advantage can be difficult going at it alone! You cannot be enrolled in both Original Medicare and a Medicare Advantage at the same time. Also see comparing Medigap Plans vs Medicare Advantage.

Medicare Advantage Plans are appealing based on price, but they can also come with a few Medicare pitfalls that may have you reconsider the real “advantage”. For example;

1. Prices have been historically unstable.
2. Your coverage will change annually.
3. You could be locked-in without the future option for a Medigap Plan
4. You’re responsible for out-of-network, Physician costs.
5. No coverage beyond your service area.
6. Must use in-network providers.
7. No travel coverage.
8. May need a referral to see a specialist.

Additionally, If you have a MA plan and diagnosed with a critical illness such as cancer, heart attack or stroke, costs for treatment if the hospital is out-of-network may not be covered in your plan. The max out-of-pocket only applies to covered services and could require a specialist referral. People with MA plans, think they have more coverage than they actually do unlike Medigap plans, which is considered more comprehensive senior health coverage plan.

How does Original Medicare work with Medicare Part D prescription drug coverage?

Part D drug plan are compatible with Original Medicare. Enrollees have a guaranteed eligibility for a Part D plan when they enroll in Plan D (on-time). It’s best to avoid the Part D Enrollment Penalty by enrolling during your initial enrollment period (also known as, IEP). Did you know that drugs administered in a Hospital setting are generally covered under your Medicare Part A? For more information on enrollments, visit the Medicare Enrollment Periods page.

How does Dental, Vision and Hearing Insurance (DVH) work with Original Medicare?

Yes! Original Medicare is compatible with DVH plans however, since they are considered standalone plans, DVH’s would need to be purchased separately. By working with a Bridge Agent, we can help you find an affordable DVH insurance plan to fit your needs.

How does Original Medicare work with a Critical Illness Insurance for cancer, heart-attack and stroke coverage (CHAS)?

Original Medicare is compatible with CHAS insurance / cancer plans however, since they are considered standalone plans, they would need to be purchased separately. By working with a Bridge Agent, we can help you find an CHAS and/or affordable critical illness insurance plans to fit your needs.

How does Original Medicare work with a Long Term Care Insurance (LTC)?

LTC plans are compatible with Original Medicare however, since they are considered standalone plans, they would need to be purchased separately. There is talk about developing a new Medigap plan to include LTC coverage. By working with a Bridge Agent, we can help you find an affordable LTC insurance plan to fit your needs(LTC).

How does Original Medicare work with a Health Savings Account (HSA)?

Original Medicare is considered a qualified expense to pay out of your Health Savings Account (HSA). A HSA can pay for Medicare Parts A, B, C and D. Once enrolled in Medicare, enrollees are no longer able to contribute to their Health Savings Account. However, the funds can be used to pay for qualified Medicare costs stated above. If one postpones Medicare enrollment they may still contribute to their Health Savings but enrolling late will also be subject to a Medicare Late Enrollment Penalty which is a percentage increase of costs per year. Speak with your Financial Advisor to determine what works best for you!

In Conclusion

This concludes our general overview of Original Medicare. Next we will dive into each Medicare Part, starting with Part A, B, C, D and then Medicare Supplement Plans. Feel free to skip around this section or you can review the basic Medicare Parts Overview page. Then, we will meet back on the Original Medicare vs. Medicare Advantage Comparison Guide. See you then!