Medicare is a health insurance program for:
- people age 65 or older,
- people under age 65 with certain disabilities, and
- people of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant).
Part A Hospital Insurance – Most people don’t pay a premium for Part A because they or a spouse already paid for it through their payroll taxes while working. Medicare Part A (Hospital Insurance) helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care). It also helps cover hospice care and some home health care. Beneficiaries must meet certain conditions to get these benefits.
Part B Medical Insurance – Most people pay a monthly premium for Part B, which is often deducted directly from Social Security payments. Medicare Part B (Medical Insurance) helps cover doctors’ services and outpatient care. It also covers some other medical services that Part A doesn’t cover, such as some of the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary.
Medi-Gap or Supplement Plans – Many people will choose to purchase addition private insurance to supplement the Part A and B Medicare. Remember, Medicare does not cover 100% of the hospital or basic medical care. Supplemental policies fill in the “gap” of what Part A and B do not cover.
Medicare Advantage (Part C) – You can choose to purchase a Medicare Advantage Plan. These are Medicare approved private insurance plans that give extra coverage. These plans must cover all of the basic items that Medicare covers (although they may not cover expenses that are not medically necessary under Medicare. Most Medicare Advantage Plans offer extra coverage, like vision, hearing, dental, and/or health and wellness programs. Most include Medicare prescription drug coverage (Part D).
Prescription Drug Coverage (Part D) – Most people will pay a monthly premium for this coverage. Starting January 1, 2006, new Medicare prescription drug coverage will be available to everyone with Medicare. Everyone with Medicare can get this coverage that may help lower prescription drug costs and help protect against higher costs in the future. Medicare Prescription Drug Coverage is insurance. Private companies provide the coverage. Beneficiaries choose the drug plan and pay a monthly premium. Like other insurance, if a beneficiary decides not to enroll in a drug plan when they are first eligible, they may pay a penalty if they choose to join later.
Medicare can be difficult to understand. Much more information is available through Centers for Medicare and Medicaid Services. And, although Medicare is protection that we all need, it will not cover all expenses that we face as we age. The greatest expenses are not covered by Medicare and they can wipe all of our financial plan. We are here to help. For more on the greatest threat to your financial and health care future click here.