Medicare Overview

What is Medicare?

Medicare is a national healthcare program funded by the U.S. Government, created in 1965 to give coverage to people of age 65 or older who didn`t have any health insurance.

The program is administered by the Centers for Medicare and Medicaid Services (CMS), and coverage is extended to people with certain disabilities, those who have End-stage renal disease (ESRD), and those who have Lou Gehrig’s disease as well as Amyotrophic Lateral Sclerosis (ALS).

Medicare provides healthcare at low costs, with benefits such as hospitalization, medical coverage, and more.

There are four different parts to Medicare, all of which provide different types of services for the insured, named alphabetically: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D (prescription drug coverage).

Part A & Part B (Original Medicare)

Parts A and B, otherwise known as Original Medicare, offer easy enrollment and eligibility and low monthly and yearly payments for continued coverage.

Covering the costs of Medicare includes three basic methods of payment: premiums, deductibles, and copayments/coinsurance. The same goes for all of the additional coverage options as well. These payments work like this:

Premium: A monthly payment you make to the plan based on your needs, health, and amount of coverage.

Deductible: A yearly fee you must meet to maintain your coverage (not included in your premium payment).

Copayment/Coinsurance: Each time you use benefits from your plan, you will likely have to pay an out-of-pocket fee. This will be a flat cost, a copayment, or a percentage of the total cost, known as coinsurance.

However, you likely will not have to pay Medicare Part A premiums. If you have worked at least 10 years while paying Social Security taxes, you’re eligible for premium-free Part A.

MEDICARE ADVANTAGE (PART C)

Medicare Advantage is also known as Part C of Medicare. Private insurance companies certified by Medicare administer it. If you choose to join a Medicare Advantage Plan, it will provide all of your Part A and Part B coverage.

Part C may offer extra coverage, including vision, health and wellness, hearing, and dental services. Most Medicare Advantage plans include Medicare prescription drug coverage, Part D.

In general, Part C coverage for inpatient care is covered by Medicare Part A. Regarding Part C, it covers the same services as Medicare Part A, including inpatient hospital care and inpatient care in a skilled nursing facility.

Part C also covers Home health care, but hospice care benefits remain under Original Medicare (Part A and B). As for outpatient care coverage, which is covered by Part B in general, Part C covers the same benefits as Part B.

The primary qualification for being eligible for Medicare Advantage plans is that you have already been enrolled in Original Medicare (Parts A and B) and live in the network area of the Part C provider you are considering applying to.

Several factors, such as premiums, deductibles, copayments, and coinsurance, determine Medicare Part C costs. These amounts can range from $0 to hundreds of dollars for monthly premiums and yearly deductibles. But your chosen plan will determine most of your Part C costs.

There are two main types of Medicare Advantage plans offered:

  • Health Maintenance Organization (HMO) plans, and

  • Preferred Provider Organization (PPO) plans.

Besides these two plans, there are Private Fee-for-Service Plans (PFFS), Special Needs Plans (SNP), and Medicare Medical Savings Account (MSA) Plans.

MEDICARE PART D

Medicare Part D is a prescription drug benefit program that is offered as part of the wider Medicare federal health insurance program. Part D is an optional benefit that is administered by private insurance companies and available to anyone who has Medicare.

Medicare Part D is simply insurance for your medication needs. You pay a monthly premium to an insurance carrier for your Part D plan. In return, you use the insurance carrier’s network of pharmacies to purchase your prescription medications.

Instead of paying full price, you will pay a copay or percentage of the drug’s cost. The insurance company will pay the rest.

There are 4 stages to a Part D drug plan:

  • Annual Deductible ($545),

  • Initial Coverage ($5,030),

  • Coverage Gap ($8,000), and

  • Catastrophic Coverage