If you are new to Medicare, the jargon may sound foreign, but you don’t need a 4 page Medicare for Dummies book to figure it out. You’ll be well on your way once you learn the ABCs and D of Medicare.
Medicare in Simple Terms
Medicare is health insurance for people 65 and older and those with qualifying disabilities.
Medicare is not free. There are monthly premium costs and Out-of-Pocket Costs for Medicare are the remaining costs that are not covered by the beneficiary's health insurance plan. These costs can come from the beneficiary's monthly premiums, deductibles, coinsurance, and copayments. when you use healthcare services.
Medicare is not end-to-end healthcare. It covers approved medical services, but it does not include routine care for dental, vision, hearing, chiropractic, and podiatry services. Nor does it include coverage for outpatient prescription medications.
When the Medicare program was founded, there were two parts to Medicare insurance, Part A and Part B. Combined, they are commonly called Original Medicare is private fee-for-service health insurance for people on Medicare. It has two parts. Part A is hospital coverage. Part B is medical coverage..
Medicare Part A is Hospital Insurance
Part A covers Inpatient care refers to care provided in a hospital or other inpatient facility. Inpatients are admitted and stay at least one night depending on their condition. at hospitals, skilled nursing facilities (SNFs), and mental health facilities. It also covers Hospice is a special way of caring for people who are terminally ill. Hospice care involves a team-oriented approach that addresses the medical, physical, social, emotional, and spiritual needs of the patient. care at home or in a hospice facility. Learn more about Medicare Part A is hospital coverage for Medicare beneficiaries. It covers inpatient care in hospitals and skilled nursing facilities. It also covers limited home healthcare services and hospice care..
Medicare Part B is Medical Insurance
Part B covers doctor visits, lab tests, diagnostics, specialists, and other medical care. It also covers drugs administered in your doctor’s office, medical supplies, and Durable medical equipment (DME) is equipment that is designed to last and can be used repeatedly. It is suitable for home use and includes wheelchairs, oxygen equipment, and hospital beds.. Learn more about Medicare Part B is medical coverage for people with Original Medicare benefits. It covers doctor visits, preventative care, tests, durable medical equipment, and supplies. Medicare Part B pays 80 percent of most medically necessary healthcare services..
Medicare’s Private Parts
Original Medicare worked great for the first two or three decades, but as the cost of healthcare and medications skyrocketed, both the Medicare program and the people on Medicare needed more options.
In 2003, the George W. Bush Administration signed the Medicare Modernization Act (MMA) into law, giving us Medicare Parts C and D. These are Medicare’s private health insurance options.
Private Health Plans (Part C)
Medicare Part C allows private health insurance companies to sell approved health plans to people on Medicare. More commonly known as Medicare Advantage, these plans completely replace a beneficiary’s Part A and Part B coverage and may add more benefits. The most common extra benefit most plans include is prescription drug coverage. Learn more about Medicare Part C is Medicare's private health plan option. Also known as Medicare Advantage, Medicare Part C plans are a type of Medicare health plan offered by companies that contract with Medicare to provide all....
Prescription Drug Plans (Part D)
Medicare Part D allows private companies to sell prescription drug plans to people on Medicare. Part D plans help millions of Americans get the medications they need at an affordable price.
Both Part C and Part D plans are optional. You are not required to participate in these private insurance products. However, with Part D, there is a potential penalty if you don’t enroll when first eligible. Learn more about Medicare Part D plans are an option Medicare beneficiaries can use to get prescription drug coverage. Part D plans provide cost-sharing on covered medications in four different phases: deductible, initial coverage, coverage gap, and catastrophic. Each....
Medicare Supplements (Medigap)
Another private plan option you can buy is Medigap. This is the term the federal government coined for Medicare Supplements are additional insurance policies that Medicare beneficiaries can purchase to cover the gaps in their Original Medicare (Medicare Part A and Medicare Part B) health insurance coverage.. It’s called Medigap because it covers the cost gaps in Original Medicare.
Medigap policies cover some out-of-pocket costs that people on Medicare pay themselves, including A deductible is an amount a beneficiary must pay for their health care expenses before the health insurance policy begins to pay its share., Coinsurance is a percentage of the total you are required to pay for a medical service. , and A copayment, also known as a copay, is a set dollar amount you are required to pay for a medical service..
Medigap does not add extra benefits to Original Medicare coverage. For example, Medigap policies don’t cover prescriptions, dental, or vision. They only cover Medicare-approved services.
If you don’t get any extras, what is the benefit of a Medigap policy?
- The benefit is knowing that your major medical costs are covered, no matter what.
- The benefit is knowing that once you have a policy, it can’t be canceled (so long as you pay your A premium is an amount that an insurance policyholder must pay for coverage. Premiums are typically paid on a monthly basis. In the federal Medicare program, there are four different types of premiums. ).
- The benefit is that you can use any doctor who accepts Medicare without a referral or pre-authorization requirements.
- The benefit is knowing that your coverage will not change.
Who Does Original Medicare + Medigap Benefit?
Here are the situations where Original Medicare and a Medicare Supplement work great:
- You can afford the monthly premiums — If you want the best coverage and you can afford the monthly premiums as you age, Original Medicare and a comprehensive Medigap policy are the best choice because it provides the most financial coverage.
- You are a snowbird or plan to travel in your retirement — Original Medicare and a Medigap policy travel everywhere you go in the USA and its territories. Plus, all comprehensive Medigap policies offer foreign travel emergency coverage (80% up to the limit of the policy).
- You want doctor choice without limitations — Original Medicare has the largest network of doctors nationwide. According to the Centers for Medicare & Medicaid is a public health insurance program that provides health care coverage to low-income families and individuals in the United States. Services, 98% of providers participate in Medicare. And you never need a referral or Prior authorization is a process used by health plans to control healthcare costs. Most HMO plans and some PPO plans require authorization before receiving certain treatments, medical services, or prescription drugs..
- You want coverage stability — Original Medicare and Medigap policies rarely change. Over the past decade, Original Medicare has added new benefits, including additions to preventive care. The only change to Medigap in the past decade was the exclusion of coverage for the Part B deductible.
- You have a chronic health condition(s) when you qualify for Medicare — Some chronic health conditions are easily treated with medications, but many worsen with age. Although Medicare Supplements cost more up front, they may save you money in the long run. Have this discussion with your insurance agent.
Who Does Medicare Advantage Benefit?
Here are the situations where Medicare Advantage works great:
- Super healthy seniors — This is a good option if you are healthy, work at maintaining your health, and want additional options that Original Medicare does not offer. For healthy seniors, Medicare Advantage offers additional benefits and monthly savings.
- Dual-eligible beneficiaries are those who receive both Medicare and Medicaid benefits. It includes beneficiaries enrolled in Medicare Part A and/or Part B while receiving full Medicaid and/or financial assistance through a Medicare Savings Program.... people — If you qualify for both Medicare and Medicaid, there’s a good chance that you can get a Medicare Advantage Special Needs Plan (SNP) or premium assistance through the Medicare QMB (Medicare Qualified A person who has health care insurance through the Medicare or Medicaid programs.) Program. In some cases, Medicare Savings Programs may also pay Medicare Part A and Medicare Part B deductibles, coinsurance, and copayments if you meet certain conditions. Call your local Medicaid office.
- Retirees with health plan benefits — Many people earn benefits when they retire from their federal, state, county, city, railroad, or corporate jobs. In many cases, these benefits include group Medicare Advantage (MA), also known as Medicare Part C, are health plans from private insurance companies that are available to people eligible for Original Medicare (Medicare Part A and Medicare Part B). that assist with monthly premiums and, in some cases, copayments too.
- Individuals who can’t get a Medicare Supplement — In most states, Medicare Supplement Insurance is only guaranteed-issue to people age 65 when they first sign up for Medicare. If you are under 65 or did not buy a Medicare Supplement during your Upon initial enrollment in Medicare Part A and Part B, beneficiaries have a one-time, six-month period to buy a Medicare supplement policy with guaranteed issue rights. This is the Medigap Open Enrollment Period., there’s no guarantee you will be accepted.
- Institutionalized and chronically ill people — In some areas you may have access to Medicare Advantage Special Needs Plans specifically designed for individualized (I-SNP) or have certain chronic illnesses (C-SNP).
There are four parts to Medicare. Parts A and B are Original Medicare for hospital and medical care, respectively. You can supplement this coverage with a comprehensive Medigap plan that covers most of your copayment, coinsurance, and deductible costs.
Medicare Part C and Part D are health plans available from private insurers. Medicare Advantage plans (Part C) replace your Original Medicare benefits and may include extra benefits, like routine dental, vision, and hearing, and prescription drug coverage. Part D plans offer stand-alone prescription drug coverage.
If you qualify for both Medicare and Medicaid, be sure to call the Social Security Administration to see what additional benefit may be available to you. Medicare Advantage Special Needs Plans are particularly advantageous, as is the Social Security's Low-Income Subsidy (LIS) program helps Medicare beneficiaries pay for their Medicare Part D prescription drugs by paying some of the costs. Also known as "Extra Help", beneficiaries who qualify for LIS receive premium... program for Part D assistance.
If you have one or more chronic health conditions, and you need help understanding which plan is best, it’s time to speak with a licensed health insurance agent.
Call 1-855-728-0510 (TTY 711) and speak with a licensed HealthCompare insurance agent. There’s no obligation, and they offer more plan options than any other national agency.
Citations & References:
- Medicare.gov: the official U.S. government site for Medicare | Medicare
- Medicare costs at a glance | Medicare
- Medicare.gov: the official U.S. government site for Medicare | Medicare