Secrets and Basics of Medicare – Don’t Ignore This!
Everyone who faces health care decisions must know the basics of Medicare. In fact, Medicare can become an important aspect in a person’s decisions. Grandparents, parents, relatives and friends must be familiar with Medicare.
Learning about basics of Medicare is like learning a new language. Also, it is essential to know the differences and methods of getting Medicare coverage. One must learn the words, understand the main ideas and become fluent.
This article breaks Medicare down into pieces of information that is easy to comprehend. And with this knowledge, anyone can become prepared to explore in Medicare.
What is Medicare?
Medicare exists as the federal health insurance program. This program is for seniors who recently turned and retired at age 65 or beyond. In addition, Medicare is also for certain younger individuals with health conditions and disabilities. Also, it is for people with End-Stage Renal Disease which is permanent kidney failure that require dialysis or transplant.
The federal agency that manages Medicare is The Centers for Medicare & Medicaid Services (CMS). The program is part funded by Social Security. The Medicare tax an individual pays from their income is part funded through premiums. Additionally, these premiums are from people with Medicare pay and in part funded through the federal budget.
Once an individual becomes eligible for Medicare, they can enroll in different programs. Basically, they may enroll in the Original Medicare. This is the traditional fee-for-service program. Furthermore, the federal government directly offers this program.
They may also decide to enroll in a Medicare Advantage(also called Part C) Plan. This is a type of private insurance. Moreover, this is offered by companies that have existing contracts with Medicare.
It is essential to understand the basics of Medicare and its coverage options. Also, one must pick a program carefully. How one chooses to get the benefits and who they get it from may affect their finances. Further, it affects where they may get their care.
What are the different parts of Medicare?
There are four parts of Medicare. These different elements of Medicare help cover particular services. In a manner, these are widely known as Part A, Part B, Part C, and Part D. It is essential to know the differences between Original Medicare, Medicare Advantage(also called Part C) & Prescription Drug(also called Part D) Plans, and Medicare Supplement insurance polices (Medigap)
Did you know that anyone can choose how to get their Medicare coverage? An eligible senior or patient must first consider how they want to get their coverage. They may either choose coverage through Original Medicare, or a Medicare Advantage Plan such as an HMO. Likewise, both plans have Part A and Part B coverage.
The federal government directly administers Original Medicare. This is the way most people get their Medicare. Correspondingly, it has two parts:
Medicare Part A (Hospital Insurance)
This basically covers most necessary medical care. These include inpatient hospital stays and care in a skilled nursing facility. In addition, it covers hospice care and some home health care. Also, Part A is free for most people.
It becomes free when one has worked and paid Social Security taxes. Taxes here refer to the ones paid for at least ten years. A monthly premium will be added if someone has worked and paid taxes for a shorter time.
Medicare Part B (Medical Insurance)
To enumerate, this covers certain doctors’ services, outpatient care, durable medical equipment and preventive services. In addition, it covers other healthcare providers and home health care. Further, laboratory tests, x-rays, and mental health care are covered in this plan. Most importantly, Part B requires a monthly premium.
Original Medicare only pays 80% of the medical or doctor bills. This is why some seniors pay additional monthly costs such as a Medical Supplement.
Medicare Advantage Plans (Medicare Part C)
This type of Medicare health plan is offered by private companies that are approved by Medicare. Further, it is not a separate benefit. Usually, it includes Medicare prescription drugs(also called Part D) coverage as part of the plan. In most plans, they use doctors, hospitals and other providers that are in their plan’s provided network.
This is the part of Medicare policy that entitles private health insurance companies to provide Medicare benefits. These private companies are commonly Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private Fee-for-Service Plans, Special Needs Plans and Medicare Medical Savings Account Plans.
Medicare Advantage(also called Part C) includes all benefits covered under Part A and B. To emphasize, they can provide all benefits with different rules, costs and restrictions. Others also have extra coverage like vision or dental. However, these can affect how and when they receive care.
Anyone can become automatically be enrolled in a Medicare Advantage Plan when they have health coverage. This health coverage could be from their union, current or former employer. The insured may have the option to stay with the plan. Otherwise, they can switch to Original Medical. Also, they may enroll in a different Medical Advantage Plan. However, they must speak with their employer/union before doing so.
One may be required to pay more or pay all of the costs. This happens when one decides to use a provider outside of their plans’ provider network. Also, there are usually co-payments or co-insurance for covered services. Further, they may pay a monthly premium in addition to the Part B premium.
What distinguishes Original Medicare from Medicare Advantage Plans?
There are a few differences that need to be understood. Yes, even though both Original Medicare and Medicare Advantage Plans cover Part A and B.
Actually, Original Medicare is provided directly through Medicare. An individual may have the choice of doctors, hospitals, and other health care providers that accept Medicare. Further, Original Medicare covers about 80% of one’s health care costs.
Generally, any supplemental coverage pays deductibles and co-insurance. They also usually pay a monthly B premium.
Medicare Prescription Drug Plans (Medicare Part D)
Generally, this helps cover the cost of prescription drugs. These are plans that add drug coverage to Medicare. In addition, they are run by private insurance companies that are approved by Medicare.
An individual pays a monthly premium to add this coverage apart from Part B premium. This coverage helps lower an individual’s drug costs. Also, it helps protect them against higher costs in the future.
Part D adds prescription drug coverage to Original Medicare or some Medicare Cost Plans. Others may also be Medicare Private-Fee-for-Service Plans and Medicare Medical Savings Account Plans. Medicare-approved insurance companies and other private companies provide these plans.
One may get Plan D through their Medical Coverage Plan if their Medicare Advantage Plan offers drug coverage. Otherwise, they may join a Medicare Prescription Drug Plan.
Medicare Supplement Insurance Policies (Medigap)
Remember how Medicare pays about 80% of healthcare costs? Well, Medicare Supplemental Insurance Policies or Medigap is a different kind. This policy pays the rest or 20% of the doctor/medical bills.
This coverage is offered by private companies to fill in the gaps in original Medicare. With the Medicare Supplement Insurance, one may pay a monthly premium. This is usually in addition to Part B premium.
The average cost could be $150-$350 per month. Also, the costs for that premium can vary between companies and policies.
Further, the insured may get similar coverage through an employer or union. It is essential for one to realize that Medigap policies do not work with Medicare Advantage Plans. In fact, it is illegal for someone to sell a Medigap Policy.
If a senior chooses this route with Original Medicare, they are required by law to purchase Part D.
How to be automatically enrolled?
A person is automatically enrolled in Part A and Part B Coverage with the following conditions:
- When a person turns 65 and getting Social Security or Railroad Retirement Board (RRB) benefits. In fact, a Medicare card is mailed 3 months before their 65th
- Those under 65 and disabled. They automatically get Part A and Part B after having disability benefits from Social Security or certain disability benefits from the RRB for 24 months. Certainly, a Medicare card is mailed to them 3 months before the 25thmonth of disability.
- Patients with ALS (Amyotrophic Lateral Sclerosis) or also known as Lou Gehrig’s disease. Those with ALS automatically get Part A and Part B the month the disability benefits begin.
One must know that Part B here is optional. Those who do not want Part B must follow the instructions that come with the Medicare card. Also, they must send the card back. Those who keeps Part B card will pay the monthly premiums.
When can someone with Medicare get Medicare Advantage Plan or Medicare Drug Plan?
There are times when a person can sign up for a Medicare Drug Plan or Medicare Advantage Plan. This happens when:
- A person just turned 65
- Someone becomes eligible for Medicare during their Initial Enrollment Period
- Between October 15-December 7 each year, with coverage beginning on January 1 of the following year
- A person qualified for a Special Enrollment Period (SEP) due to certain circumstances
- Moving out of the plan’s service area
- Having both Medicare and Medicaid
- Qualifying for Extra Help to pay for prescription drugs
- Living in an institution such as a nursing home
Moreover, it is possible to join, switch or drop a Medicare Advantage Plan under definite instances.
How is Medicare different from Medicaid?
Medicare is way different from Medicaid. Medicaid is another government program that provides health insurance. It is funded and run by the federal government in partnership with states. It covers people with limited incomes.
Medicaid depends on the state. It can be available to people below a certain income level. Further, these people meet certain criteria (health status, pregnancy, age, etc.). Unlike Medicaid, Medicare eligibility does not depend on income.
What does Medicare costs include?
Medicare helps anyone pay for a great deal of health care services. However, one must pay a share of the cost too. Basically, the Medicare costs include Premiums, Deductibles, Co-Payments, and Co-Insurance.
All insured explicitly pay premiums. Co-payments (co-pays), deductibles and co-insurance are ways Medicare shares the cost of someone’s care.
Premium is the fixed amount someone pays. They may pay a premium to Medicare, private insurance company or both. Actually, it depends on their coverage. Most premiums charge monthly and may change from year to year.
A deductible refers to the set amount that someone pays out of the pocket. This is for covered services before their plan begins to pay. In fact, they can have a big impact on someone’s health care budget.
A co-pay is the fixed amount someone pays by the time they receive a covered service. For instance, they may pay $20 every time they go to the doctor. Or, they may pay $12 when they fill a prescription.
This refers to when the insured and their plan split the cost of a covered service. To demonstrate, the plan pays the 80% of the health service and the insured pays the rest of the 20%.
It is essential for everyone to understand their Medicare coverage options. Also, they must pick their coverage carefully. There is a lot to know about Medicare. You may begin by learning early about what is covered and not. There are plenty of opportunities you can get from Medicare. Take time in understanding and comprehending Parts A, B, C, D including Medigap Insurance. It is a complex system. Most people seek help in choosing a plan. Just take time in navigating the options and getting the right medical coverage.