Medicare is the federal health insurance program created in 1965 for people ages 65 and over, regardless of income, medical history, or health status. The program was expanded in 1972 to cover certain people under age 65 who have a long-term disability. Today, Medicare plays a key role in providing health and financial security to 60 million older people and younger people with disabilities. This program is divided into various parts, and it’s important to learn how these fit together. The program helps to pay for many medical care services, including hospitalizations, physician visits, prescription drugs, preventive services, skilled nursing facility and home health care, and hospice care.
Medicare Part A is hospital insurance that assists you with the cost of inpatient care and skilled nursing facility stays. It also helps with things like hospice and home health care. In general, you should think of the inpatient hospital benefit as Medicare coverage for room and board in the hospital. It covers the cost of your semi-private room. Part A does NOT cover many of the actual treatments that might occur, such as scans or surgeries. Those fall under Part B. The cost of Part A for most people at age 65 is $0. This is because during your working years you have paid taxes to pre-fund the premiums for your hospital benefits. If you don’t automatically qualify for premium-free coverage, most individuals can still apply for it. You’ll pay a hefty monthly premium to get it though.
Medicare Part B is your outpatient medical coverage Part B covers essentially all of your other coverage outside of your inpatient hospital fees. Without Part B, you would be uninsured for doctor’s visits (including doctors who treat you in the hospital). You would also not have Medicare coverage for lab work, preventive services, and surgeries. More importantly, Part B covers cancer therapy and kidney dialysis. These are extremely expensive items that would cost a fortune without supplemental coverage. The cost of Part B is set by Social Security and it changes from year to year. Individuals in higher income brackets pay more than those in lower incomes brackets. How much you pay is determined by your adjusted gross income reported to the IRS in recent years.
Medicare Part C is the Medicare Advantage program, or private insurance. The cost of Advantage plans varies by carrier, county of residence, and plan selected. To enroll in a Part C plan, you must first be enrolled in both Parts A and B. Even if you find a Part C plan with a very low premium, you will still pay for Part B. You must also live in the plan service area. Once you enroll, your Medicare coverage will from the Advantage plan itself, not from the government. The reason you don’t enroll in Part C at Social Security is that Part C is voluntary. Many people prefer to get their Medicare coverage from Original Medicare and traditional supplemental plans. These people do not want a Part C Advantage plan, so they will simply not enroll in one. It is your choice whether you wish to opt for one as opposed to just staying with your original Medicare A & B and enrolling in supplemental options.
Medicare Part D is the newest part of our national health insurance program for people age 65 & up. For half a century, there was no Medicare coverage for prescription medicines. In 2006, our federal government rolled out Part D. You usually define Part D as a pharmacy card. It covers retail prescription drugs that you pick up yourself at the pharmacy or order via mail order. You choose a carrier and enroll in their drug plan, and that’s how you sign up for Part D drug plan. Most states have about 30 drug plans to choose from, and the best way to determine which one is the right fit for you is to have your agent run a Part D analysis using Medicare’s prescription drug finder tool.
What is Medicare vs Medicaid?
A common question around here is “What is Medicare vs Medicaid?” By definition, it is a health insurance program for the elderly. Medicaid, on the other hand, if financial and/or healthcare assistance for low-income individuals. Some people 65 and older can qualify for both. In that scenario, Medicare is primary and Medicaid is secondary. The government has several Savings Programs which you can apply for through your state’s Medicaid office. These may help you to pay your Part B premiums as well as provide drug plan assistance. Check with your state’s Medicaid office to see if you qualify.
The first step to making Medicare work for you is knowledge.
Let us help you learn your basic benefits, and then help you with choosing the most appropriate options.