Medicare plans

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Medicare: A Brief Overview

In July of 1965, President Lyndon B. Johnson signed a Medicare bill into law so people 65 and older could receive the healthcare coverage they needed from a national program. Initially, the only coverage options were Part A and Part B.

Throughout the years, the coverage has evolved and changed to cover more people than it did in its early years.

Now, over 60 million people have coverage from Medicare. While Part A and Part B will provide coverage for the majority of your expenses, there are federally regulated supplemental policies that you can purchase to help fill in the gaps that aren’t covered in full by Original Medicare.

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Who Qualifies for Medicare?

Medicare mainly covers those 65 and up, but you can also qualify if you have certain disabilities or illnesses.

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Understanding Medicare Coverage

What is Part A? What Does Medicare Part A Cover?

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.

Additionally, it covers the cost of your semi-private room. However, Part A does NOT cover all of the treatments that might occur in a hospital or clinical setting, such as outpatient surgeries. Those could 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. You can also get Part A for $0 through a spouse or ex-spouse’s work history. Even if you don’t automatically qualify for premium-free coverage, most people age 65 can still get it – they would just pay a hefty premium for it.

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What is Medicare Part B?

Part B is your outpatient medical coverage. Part B covers essentially all of your other medical services outside of your inpatient hospital care. Furthermore, 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, ambulance services, and outpatient surgeries.

More importantly, Part B covers cancer therapy and kidney dialysis. These are extremely expensive items that would cost a fortune without Part B and supplemental coverage.

Social Security sets the cost of Part B and changes it from year to year. Individuals in higher income brackets pay more than those in lower income brackets. Your modified adjusted gross income reported to the IRS determines what your Part B premium will be.
 

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What is Medicare Part C?

What is Part C, and why don’t you have to enroll in it at Social Security like A & B?

Part C refers to 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 and apply during a valid election period.

Once you enroll, your Medicare coverage will come 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 Medigap 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 Medigap in addition to a Part D plan.

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What is Medicare Part D?

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 and tens of millions of Medicare beneficiaries signed up to get coverage for their outpatient drugs.

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 a Part D drug plan. Most states have about 30 drug plans to choose from. However, the best way to determine which one is the right fit for you is to use Medicare’s prescription drug finder tool.

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What doesn’t Medicare cover?

This is a great question, seeing that many people are unaware that it does not cover every health expense that beneficiaries will encounter.

 

Medicare does not cover:

• Long-term care

• Hearing aids

• Routine dental care

• Routine vision care

• Medical care outside of the U.S.

• Dentures

• Plastic and/or cosmetic surgery

• Massage therapy

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*Medicare Parts A and B do not include prescription drug coverage, which is provided through Medicare Part D. You are not required to enroll in Medicare Part D. However, if you do not have prescription drug coverage through another plan and choose not to enroll in Part D when you first become eligible, you could end up paying a penalty for late enrollment if you decide to enroll in Part D later.  

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A quick guide to Medicare coverage combinations on the chart 

 

Parts A and B: Also called Original Medicare, Part A covers services for hospital stays and similar inpatient procedures. And Part B includes coverage for doctor visits and other procedures that don’t require an overnight stay in the hospital. 

 

Part C: Also called Medicare Advantage, Part C is made up of plans approved by Medicare. Private insurance companies offer these plans. Medicare Advantage plans usually include a network of health care providers. Some require you to use their network of providers while others allow you to go out of network, usually for a higher cost. 

 

Part D: This part of Medicare provides prescription drug coverage. 

 

Medicare Supplement plan: Private insurance companies provide these supplement plans that work with Original Medicare. These plans help cover some of the costs associated with it. 

 

A quick guide to Medicare benefits on the chart 

 

• Hospital coverage: Benefits for hospital stays and inpatient procedures. 

• Visits to doctors and other health care professionals: Coverage for seeing a health care professional as an outpatient. 

• Preventive care coverage: Benefits like annual physical exams, certain vaccines and some health screenings. 

• Prescription drug coverage: Benefits for prescription medication. 

• Coverage while traveling abroad: Benefits for medical care received outside the United States. 

• Dental coverage: Benefits for routine care for your teeth. 

• Vision coverage: Benefits for routine care for your eyesight. 

• Hearing coverage: Benefits for routine care for your hearing. 

• Fitness membership benefits: Benefits for gym or fitness club memberships. 

• Out-of-pocket maximum protection: A benefit that protects you from paying more than a certain amount for your covered medical care each year.