Unlike standard insurance which has an annual deductible, Part A operates on Benefit Periods.

You pay a substantial deductible for each benefit period.

A benefit period begins the day you’re admitted and ends when you haven’t received inpatient care for 60 consecutive days. If you go back into the hospital after those 60 days, you must pay the deductible again.

If your hospital stay extends beyond 60 days in a single benefit period, you stop paying $0 and start paying a daily rate.

You have a total of 60 “Lifetime Reserve Days” to use if you are in the hospital for more than 90 days in a benefit period.

Critical Rule: These days do not reset. Once you use a reserve day, it is gone forever. After these 60 days are exhausted, you are responsible for 100% of hospital costs unless you have a Medigap plan.

Medicare Part A covers skilled nursing (rehab), but strict rules apply:

• The 3-Day Rule: You must have been an inpatient in a hospital for at least 3 consecutive days (not counting discharge day) before being admitted to the SNF.
• Days 1-20: $0 cost to you.
• Days 21-100: You pay a significant daily copay.
• Day 101+: You pay 100% of all costs.

For beneficiaries certified with a terminal illness (life expectancy of 6 months or less), coverage focuses on comfort (palliative care) rather than cure.

Your Costs:

• $0 for the hospice care itself.
• Up to a $5 copay for prescription drugs for pain and symptom management.
• 5% coinsurance for inpatient respite care (short-term inpatient stay to give caregivers a break).

If a hospital has to buy blood for you, you must pay for the first 3 pints of blood you receive in a calendar year.

If you, or someone else, donates the blood to replace it, you won’t have to pay. Most Medigap plans cover this cost 100%.

Most people pay the standard monthly premium, which changes annually. This amount is usually deducted automatically from your Social Security check.

If you have high income, you may pay an IRMAA surcharge on top of this base amount.

Before Medicare Part B pays its 80% share of your outpatient bills, you must pay an annual deductible out of pocket.

Once this deductible is met for the year, you typically pay 20% of approved costs.

Note: Medigap Plan G does not cover this deductible. Medigap Plan C and F do (but are only available to those eligible before 2020).

Doctors who do not “accept assignment” can charge up to 15% above the Medicare-approved amount for a service.

Example: Medicare approves $100. Doctor charges $115. Medicare pays $80. You pay your $20 coinsurance PLUS the $15 excess charge.

Solution: Medigap Plan G and Plan F cover excess charges 100%.

Original Medicare (Parts A & B) does NOT cover:

• Routine Dental (Cleanings, fillings, dentures)
• Routine Vision (Eye exams, glasses, contacts)
• Routine Hearing (Hearing aids or exams)
• Long-term care (Nursing homes for custodial care)
• Cosmetic surgery
• Foot care (Routine podiatry)

Part B covers medically necessary equipment like wheelchairs, walkers, hospital beds, and oxygen tanks.

The Rules:

• Your doctor must prescribe it.
• The equipment supplier must be enrolled in Medicare.
• You generally pay 20% of the Medicare-approved amount (after the deductible).
• You may have to rent the equipment rather than buy it.

Some states have laws that PROHIBIT doctors from charging Part B Excess Charges. These are known as “MOM” (Medicare Overcharge Measure) states.

MOM States include: CT, MA, MN, NY, OH, PA, RI, and VT.

If you live in one of these states, doctors who accept Medicare cannot add the extra 15% charge, meaning you might not need a plan that covers it.

How they work: You generally must get your care and services from doctors, other health care providers, or hospitals in the plan’s network (except for emergency care, out-of-area urgent care, or temporary out-of-area dialysis).

Pros: Usually lower premiums (often $0), coordinated care, often include dental/vision.

Cons: Strict network rules. Need referrals for specialists. No out-of-network coverage generally.

How they work: You have a network of doctors, but you can also see out-of-network providers for covered services, usually for a higher cost.

Pros: No referrals needed for specialists. Flexibility to travel.

Cons: Monthly premiums are often higher than HMOs. Out-of-pocket costs are higher if you go out-of-network.

A PFFS plan determines how much it will pay doctors and how much you must pay when you get care.

Crucial Detail: You can go to any Medicare-approved doctor, BUT the doctor must agree to the plan’s payment terms at every single visit. A doctor can agree to treat you once and refuse the next time.

Designed specifically for individuals who are eligible for both Medicare and Medicaid.

These plans usually have $0 premiums and extremely low (or $0) copays for medical services and drugs. They often include significant extra benefits like large OTC allowances, grocery cards for healthy food, transportation, and comprehensive dental.

These plans are restricted to people with specific severe or disabling chronic conditions. The most common C-SNPs target:

• Diabetes Mellitus
• Chronic Heart Failure
• Cardiovascular Disorders

Benefits, provider networks, and drug formularies are tailored to match the specific condition.

If you join a Medicare Advantage plan for the first time when you turn 65 (or when you first get Part B), you have a 12-month trial period.

During this first year, if you are unhappy with the Advantage plan, you have a special right to drop it and switch back to Original Medicare and purchase a Medigap plan without health questions (medical underwriting).

This is a risk-free way to test if an Advantage plan works for you.

These are a special type of Medicare Advantage plan that combines a high-deductible health plan with a bank account.

1. Medicare deposits money into the account for you at the start of the year.
2. You use this money to pay for your health care services tax-free.
3. If you spend all the money in the account, you pay out-of-pocket until you reach the plan’s high deductible.

Important: MSA plans do NOT cover prescription drugs. You must buy a separate Part D plan.

Most Medicare drug plans have an annual deductible. You pay 100% of your prescription drug costs until you have paid this deductible amount set by the plan.

Some plans offer a $0 deductible or waive the deductible for cheaper Tier 1 and Tier 2 generic drugs.

Once you meet your deductible, you enter the Initial Coverage Stage.

During this stage, you pay a copayment (a flat fee, e.g., $10) or coinsurance (a percentage, e.g., 25%) for your drugs, and the plan pays the rest.

You stay in this stage until your total out-of-pocket spending reaches the annual Catastrophic Cap.

Medicare now has a hard cap on annual out-of-pocket drug costs.

Once your out-of-pocket spending on covered drugs reaches this limit in a calendar year, you pay $0 for your covered Part D drugs for the rest of the year.

This eliminates the old “Donut Hole” structure where you paid 25% indefinitely.

This program allows you to spread your out-of-pocket drug costs over the course of the year in monthly installments, rather than paying large amounts all at once at the pharmacy counter.

Example: Instead of paying a $600 bill for a specialty drug in January, you might pay approximately $50 per month spread across the year. It does not lower the total cost, but helps manage cash flow.

A “Formulary” is the list of drugs a plan covers. Plans organize these drugs into “Tiers” which determine your cost:

• Tier 1: Preferred Generic (Lowest copay, sometimes $0)
• Tier 2: Generic (Low copay)
• Tier 3: Preferred Brand (Higher copay)
• Tier 4: Non-Preferred Drug (High percentage coinsurance)
• Tier 5: Specialty Tier (Highest cost, very expensive drugs)

Plan G is the most popular plan for new Medicare beneficiaries. It covers 100% of all Medicare gaps, including hospital coinsurance, skilled nursing, and excess charges, with one exception:

You must pay the annual Part B deductible yourself. Once that small deductible is met at doctor visits, Plan G pays 100% of approved costs for the rest of the year.

Plan N offers lower monthly premiums than Plan G. In exchange, you take on a bit more cost-sharing:

• You pay the Part B Annual Deductible.
• After the deductible, you pay up to a $20 copay for some doctor’s office visits.
• You pay up to a $50 copay for Emergency Room visits (waived if you are admitted to the hospital).
• Plan N does not cover Part B Excess Charges.

This plan provides the exact same coverage as standard Plan G, but only AFTER you have paid a high annual deductible out-of-pocket (adjusted annually).

Until you reach that amount, you pay Medicare deductibles and coinsurance yourself. Because of this high risk, the monthly premiums are very low.

Plan F is often called “First Dollar Coverage” because it covers everything, including the Part B deductible. You pay zero out-of-pocket for covered services.

RESTRICTION: You can only buy Plan F if you became eligible for Medicare before January 1, 2020. If you turned 65 after that date, you cannot buy it.

Similar to High Deductible G, this plan offers Plan F benefits only after a high annual deductible is met. It also requires eligibility before Jan 1, 2020.

Plan C is very similar to Plan F. It covers the Part B deductible. However, it does not cover Part B Excess Charges.

Like Plan F, it is only available to those eligible for Medicare before January 1, 2020.

Plan K has very low premiums because it covers only 50% of most Medicare gaps (like the Part A deductible and Part B coinsurance).

However, it features an annual out-of-pocket limit. Once you spend that amount, the plan pays 100% for the rest of the year.

Similar to Plan K, but it covers 75% of most Medicare gaps.

It also has an annual out-of-pocket limit, which is lower than Plan K’s limit.

Plan M has higher cost-sharing than Plan N or G. It covers:

• Only 50% of the Part A Hospital Deductible.
• It does not cover the Part B deductible.
• It does not cover Excess Charges.

Plan A covers the “Core Benefits” only: Part A coinsurance plus 365 extra hospital days, Part B coinsurance (20%), blood, and hospice coinsurance.

It does NOT cover the Part A hospital deductible or the Part B medical deductible.

Plan B covers everything in basic Plan A, plus it covers the Part A hospital deductible.

It does not cover the Part B deductible or excess charges.

Note: This is Medigap Plan D, not prescription Part D.

Medigap Plan D covers most gaps, including the Part A deductible and Skilled Nursing coinsurance.

It does not cover the Part B deductible or Part B excess charges. It is rarely sold today as Plan G is usually a better value.

Usually, if you want to switch Medigap plans after your initial enrollment, you must answer health questions and can be denied.

However, certain states (like CA, OR, ID, NV, and IL) have “Birthday Rules.” These allow you to switch your Medigap plan around the time of your birthday each year to a plan of equal or lesser benefits without health questions.

This is the best way to lower your rate if you are stuck in an old, expensive plan.

IRMAA stands for Income-Related Monthly Adjustment Amount.

If your modified adjusted gross income from 2 years ago is above certain thresholds, Medicare adds a surcharge to your Part B and Part D premiums.

If you (or your spouse) are still working and have health insurance from an employer, you may be able to delay enrolling in Medicare Part B without penalty.

The employer plan must be considered “Creditable Coverage” (generally companies with 20+ employees). When that coverage eventually ends, you get a Special Enrollment Period (SEP) to sign up for Part B.

If you don’t sign up for Part B when first eligible and you don’t have other creditable coverage, you face a penalty.

Your monthly premium goes up 10% for each full 12-month period that you could have had Part B but didn’t.

Crucial: You pay this penalty for as long as you have Part B.

If you missed your Initial Enrollment Period, you generally cannot sign up for Medicare whenever you want.

You must wait for the General Enrollment Period, which runs from January 1 to March 31 each year. Your coverage will begin the month after you enroll, and you will likely face late penalties.

Original Medicare generally doesn’t cover healthcare while traveling or living outside the U.S.

If you return to the U.S. after living abroad, you may have an 8-month Special Enrollment Period to sign up for Part B without penalty if you or your spouse were working and had coverage in that country.

You have the right to file a complaint (grievance) about the quality of care, or an appeal if Medicare or your plan denies coverage or payment for a service.

There are 5 levels to the appeals process, starting with a “Redetermination” by the plan and potentially going all the way to Federal District Court.

VA coverage and Medicare are separate. VA coverage is NOT “creditable coverage” for Part B late enrollment penalties in all cases, so enrolling in Part B is often recommended to avoid penalties later.

You can use your Medicare Part A/B for non-VA doctors and hospitals, giving you more options outside the VA system.

If you are retired military, TRICARE For Life acts as a supplement to Medicare.

Crucial Rule: You MUST enroll in Medicare Part A and Part B to keep your TRICARE For Life benefits. Medicare pays first, TFL pays second.

The Trap: COBRA is generally NOT considered “creditable coverage” for Part B after you stop working.

If you keep COBRA for 18 months instead of signing up for Medicare Part B at age 65 (or retirement), you will likely face a lifelong late enrollment penalty and gaps in coverage.

Federal retirees can keep their FEHB plans in retirement.

While you don’t have to take Part B, many choose to enroll because it can waive copays and deductibles in some FEHB plans, providing near 100% coverage.