If you are nearing age 65, you may be wondering about Medicare and what it is. It is a federal health insurance program for people who are ages 65 and older. People who have certain types of disabilities may also be eligible for Medicare. The program is divided into different parts. The staff at Elder Care Direction can help you to understand all of the parts of Medicare so that you make good health insurance decisions.
What is Medicare?
Medicare is a federally funded health insurance program in the U.S. that is designed for people who are ages 65 and older. Certain people who are younger but who are disabled or who have end-stage renal disease may also be eligible for Medicare. There are several parts to Medicare, and it is important that you understand each part and how they work with each other.
Medicare Part A
Medicare Part A is hospital insurance for older adults and disabled people who receive Social Security disability insurance. It helps you to pay for the costs of inpatient stays in the hospital and at skilled nursing facilities. Part A also helps to pay for things such as home health care and hospice care. Basically, this type of Medicare pays for the cost of a semi-private hospital room. However, it doesn’t pay for many of the treatments that you might receive such as surgeries or lab scans. Those types of costs fall under Medicare Part B.
Most people who are 65 or older pay nothing for Part A because they have prepaid their premiums by paying taxes during their working years. If you did not earn enough work credits to qualify for free Medicare Part A coverage, you are still able to apply for it. However, you will have to pay a monthly premium to get it.
This covers benefits like:
- Hospital services
- Limited skilled nursing facility care
- Hospice care
- Limited home health services
- Inpatient mental health services
Medicare Part B
Medicare Part B pays for the services outside of what is covered under Part A and is outpatient medical coverage. If you do not have Part b, you will not be insured for visits to your doctor, including the doctors who provide treatment to you while you are in the hospital. Medicare Part B pays for things such as preventive care, lab work, and surgeries. It also covers kidney dialysis and cancer treatment, both of which are extremely expensive without coverage.
The Social Security Administration sets the cost of Part B, and it varies from year to year. People who are in higher income brackets can expect to pay more for Part B than people who are in lower income tax brackets. The amount that you will pay will be determined by your adjusted gross income that you have reported on your taxes in the last few years.
This part of Medicare covers certain outpatient services, such as:
- Preventive services and screenings
- Doctor appointments, including yearly wellness exams
- Lab tests
- Certain vaccinations
- Ambulance services
- Limited home health care
- Outpatient mental health services
- Durable medical equipment, such as walkers, canes
- Certain prescription drugs administered to you in an outpatient setting
Unlike Medicare Part A, Part B always comes with a monthly premium. Your premium amount may depend on:
- When you enrolled in Medicare Part B
- Whether you’re currently receiving retirement benefits
- Whether you’re billed directly for your premiums
- Whether you get both Medicare and Medicaid
- Whether the modified adjusted gross income on your tax return from two years ago is above a certain amount.*
Medicare Part C
Unlike Medicare Parts A and B, you are not required to enroll in Medicare Part C. However, it is available to you as a supplement. Medicare Part C is also called Medicare Advantage. It is private insurance that is used to supplement Parts A and B. The cost of Medicare Advantage plans will vary by the plan that you select and where you live.
Before you can enroll in a Medicare Advantage plan, you must first sign up for both Medicare Parts A and B. Even if you are able to find an Advantage plan that has a low premium, you will still be required to pay for Part B. After you enroll, your Medicare coverage will come from your Advantage plan instead of from the government.
Since Part C is voluntary, you do not enroll in it at the Social Security Administration. Many people choose to get coverage from original Medicare and Medigap plans. They do not want to buy an Advantage plan and don’t enroll in one.
The pros of Medicare Part C
- Provides coverage for services Original Medicare does not, like vision or dental
- Caps out-of-pocket expenses
- Usually offers prescription drug coverage
The cons of Medicare Part C
- Possibly must pay two premiums, one for Medicare Part B and one for your Advantage Plan
- Networks don’t usually include as many health care providers as Original Medicare
- Can’t be used in conjunction with employer-sponsored health care benefits that supplement Original Medicare
To find out if Medicare Part C is right for you, research what plans are available to you. Be sure to check:
- The premium: How much does the insurer expect you to pay each month just to have the plan? Remember, you have to stay enrolled in Original Medicare to buy a Medicare Advantage plan, which means you must also pay the Part B premium.
- The deductible: How much will you have to pay out-of-pocket before the insurer starts to cover the cost of covered health care expenses?
- Copays/coinsurance: How much will you to chip in each time you visit a doctor, hospital or pharmacy?
Medicare Part D
Medicare Part D is a relatively new part of Medicare. It is also designed for people who are ages 65 and older. For the first 50 years of Medicare, it did not pay for prescription medications. However, the government offered Part D beginning in 2006.
Part D is prescription drug coverage and may be called a pharmacy card. It covers the cost of prescription medications that you order or pick up at your local pharmacy. You can select a carrier and enroll in its drug plan. A majority of states have around 30 plans from which you can choose. ask your agent to run a Part D analysis to find the plan that is the best choice for you.
When to consider Medicare Part D
- You have no other prescription drug coverage
- You determine its more cost effective to stay on Original Medicare and Medicare Part D
- You have employer-sponsored retirement benefits that only apply to Medicare Part D plans
- You qualify for Extra Help, a program that helps low-income Americans pay for Part D prescription drug costs
When you can possibly skip Medicare Part D
- You get prescription drug coverage through a Medicare Advantage plan
- You have better prescription drug coverage through a past or current employer
- You get better coverage through other federal programs or agencies, including the Veterans Administration, TRICARE or the Federal Employee Health Benefits Program
- Whether you should opt for Original Medicare/Part D over Medicare Part C depends on your health care needs and what plans are offered in your area. You’ll have to compare plans and their major costs — premiums, deductibles, copays or coinsurance — carefully.
Medicare vs. Medicaid
It is common for people to be confused about the differences between Medicare and Medicaid. Medicare is a health insurance program that is meant for elderly or disabled people. Medicaid is health care assistance for people who have low incomes. Some people who are older than 65 are able to qualify for both Medicaid and Medicare. When that happens, Medicare is the primary insurer and Medicaid is the secondary insurer.
There are several savings programs from the government that people can apply for at the Medicaid office in their states. The savings programs might assist you with paying the premiums for your Part B coverage and help you to pay for prescription drugs.
Talk to the professionals at Elder Care Direction
Many people have trouble understanding Medicare and what it covers. The first step that you can take to get affordable health care coverage is to learn more about Medicare. The professionals at Elder Care Direction focus on helping older adults and their families to understand the various issues that people face as they grow older. We are able to help you to understand the different parts of Medicare and can help you with filling out the forms. If you are eligible for Medicaid as well as Medicare, we can also help you to fill out the applications for it, too. To learn more, contact us today to schedule a consultation by filling out our online contact form.