What is Medicare?
Medicare is a federal program developed to help pay for the high costs of health care for Americans over 65 and some disabled Americans. There are four different parts:
- Medicare Part A (hospital insurance) is free.
- Medicare Part B (medical insurance) requires a monthly premium payment to the government.
- Medicare Part C (advantage plan option) offers extended benefits over that of Medicare.
- Medicare Part D (prescription drug plan) is a fee based plan offered by private insurance companies to help cover the costs of prescription drugs.
The Parts of Medicare Explained:
Medicare Part A
Part A covers you for services of medical “entities.” This coverage contains benefits for hospitals, skilled nursing care facilities, home health care and hospice care treatment. For in-patient hospital treatment, you are covered for up to 90 days for each “spell of illness.” Medicare patients must satisfy a deductible before benefits begin. After you are out of hospital for 60 days after in-patient treatment, you may be covered for another “spell of illness” for up to 90 days. Additional time periods apply to skilled nursing, home health and hospice care based on the differences in their rates and treatment types.
Medicare Part B
Part B, an optional feature, covers you for non-institution services, like doctor’s visits, inoculations, medical tests and other outpatient services. For those receiving monthly Social Security payments, the government will deduct Part B premiums for you — around $100 per month. Like Part A, before Medicare pays anything, you must meet annual deductible amounts. Always learn if your physician accepts Medicare payments, as you will be responsible for any charges that are in excess of these insurance reimbursements.
Medicare Part C
Called Medicare Advantage (MA), this coverage is offered by private insurance companies and effectively replaces Parts A and B. You must be enrolled in both standard Medicare coverage (Parts A and B) to be eligible for this protection. Part C plans can be structured as HMOs (health maintenance organizations), PPPs (preferred provider plans) or private fee for service plans, which means you can use any physician willing to accept Medicare payments for services. MA plans are popular because you can get services unavailable from Medicare, like dental and vision coverage.
Medicare Part D
Medicare Part D offers prescription drug coverage. Available since 2006, Part D coverage can be a wonderful benefit for seniors who must continue a regimen of expensive medications on a regular basis. Like Parts A and B, there is a penalty if one enrolls in Part D at a time other than the annual enrollment period or when you turn 65. Penalties for late enrollment are similar, usually around 1 percent of the monthly premium combined with the number of months elapsed before you enrolled. Annual enrollment periods run from October 1 to December 7 every year.
Medicare was never intended to cover all of your health care costs. In-fact, the average person could end up spending thousands per year out of their own pocket. This is where Medigap comes in.
HOW DO I COVER EXCESS HEALTH CARE COSTS?
Medigap Coverage (Medicare Supplement)
An alternative to Part C Medical Advantage plans, Medigap coverage attempts to fill the “gaps” in Medicare Parts A and B. When you examine the coverage offered by Parts A and B, you will learn that there are gaps that will cost you out-of-pocket money, even after annual deductibles are met. Purchasing Part C Medical Advantage plans eliminates and replaces Parts A and B, while Medigap assists with coverage when you still have Parts A and B. Medigap plans are offered by private insurance companies.
Medicare Prescription Drug Plans
These fee based plans add prescription drug coverage to the original Medicare Plan. If you do not enroll in a prescription when you are first eligible, the costs of these drug plans increase by 1% every month thereafter.
Medicare Advantage Plans
Medicare advantage plans are health plan options that are part of the Medicare program. You generally get all your Medicare-covered health care through a private insurance company that is regulated by Medicare. These plans offer the combined benefits of a Medigap policy and a prescription drug plan. These plans are sometimes offered at no additional costs above that of Medicare Part B.
Medicare Assistance Programs
There are both Federal and State assistance programs available for lower income beneficiaries. Prescription costs can be decreased and Part B premiums paid if you qualify. MARC Insurance can assist in determining eligibility.