Understanding Medicare
To many people, Medicare can be very confusing. Understanding Medicare can be an overwhelming thing. However, it is important to have a basic understanding of what Medicare does and does not cover, in order to make sound financial decisions and ensure top quality healthcare.
Brief History of Medicare
Medicare was signed into law in 1965. In the years since then, it has been through many evolutions and changes, but the basic premise of the Medicare program remains the same. It is a Federally-administered health care program for those deemed disabled and those over 65. Medicare benefits are the same nationwide.
Understanding "Original" Medicare – The Parts of Medicare
“Original Medicare” is made up for Medicare Parts A and B. These parts of Medicare comprise coverage for doctor and hospital services and procedures. In order to have any type of supplemental insurance, Medicare Supplemental or Medicare Advantage, you must be enrolled in both Medicare Part A and Part B.
Medicare Part A
What Does It Cover: Part A is the part of Medicare that covers hospital stays and inpatient services. Medicare Part A is also the part of Medicare that covers skilled nursing facilities, hospice and home health care.
How Do You Get It: Most people get Medicare Part A automatically, as long as you or have your spouse have paid into the Medicare system during your working life. Medicare Part A will start the first day of the month you turn 65, in most cases (exception: Medicare disability). If you turn 65 on the 1st day of a month, then your Medicare will start the first day of the preceding month.
How Much Does It Cost: As long as you meet the above criteria, you do not have to pay an additional premium for Medicare Part A.Medicare Part B
What Does It Cover: Part B is the part of Medicare that helps to cover doctors’ services and outpatient care. It also helps to cover some preventive services to help maintain your health and to keep certain illnesses from getting worse.
How Do You Get It: Medicare Part B is part of “original” Medicare, so you will (in most cases) be signed up for it automatically at the same time that you are signed up for Medicare Part A. Exceptions are if you are still covered under employer insurance or wish to delay Part B. You can certainly do this, but should contact Medicare prior to turning 65 to let them know.
How Much Does It Cost: There is a premium with Medicare Part B. For 2011, the premium is $115.40/month. This is generally paid as a deduction from your Social Security check. If you are not currently receiving a SS check, then you would have to pay for Medicare Part B on a quarterly basis or via some other method.
Understanding Medicare Parts C and D
Medicare Parts C and D are additional parts of Medicare that fall outside of the “original” Medicare program. They are optional, and you don’t have to purchase them. Here is more information about what they are and what they cover:
Medicare Part C
What Does It Cover: Medicare Part C is the optional part of Medicare also known as Medicare Advantage. These plans are typically either HMOs or PPOs. They run under a contract with Medicare to provide your Medicare benefits. Essentially, it is a privatized version of Medicare. It includes Part A and Part B, and often, also includes Part D (see below).
How Do You Get It: To get Part C, you simply sign up for a Medicare Advantage plan. You can do this through Medicare itself (online or by calling 1-800-MEDICARE), through an agent, or through the private insurance company. Medicare coordinates the coverage and ensures that the Medicare Advantage company is listed as your coverage in their records.
How Much Does It Cost: The premium amount for this type of plan varies greatly. There are plans as low as $0/month (in some areas) and they can be as high as $250/month. It really depends on the coverage they are providing and the area you are in. Unlike Medicare Supplemental plans, which are standardized, the co-pays and deductibles vary greatly with these plans, so the premiums vary accordingly.
Medicare Part D
What Does It Cover: Part D is the part of Medicare that covers prescription drugs. It is run by private insurance companies that have a contract with Medicare. It helps to cover the cost of prescription drugs.
How Do You Get It: To get Medicare Part D, you must sign up for a plan through Medicare itself, an agent or through the company offering the plan.
How Much Does It Cost: The premiums for Medicare Part D also vary greatly. They can be as low as $10/month and as high as $130/month, depending on the level of coverage. When comparing these options, it is important to take into account any current medications to ensure that the plans you are considering contain good coverage for current medications.