Medicare is a federal program providing health insurance managed by Centers of Medicare and Medicaid Services. It has been around since 1966 and has about 30 to 35 private insurance companies affiliated with it.
Who is eligible for Medicare?
Medicare and Medicaid services are only meant for United States citizens. You can be a part of Medicaid if you are a legal permanent resident of United States for five years or more.
Medicare is available to citizens above the age of 65 years. In some special disability cases, a person can be considered for Medicare even if he is below 65.
In case a person has end-stage renal disease, which needs regular dialysis or kidney transplant, they can opt for Medicare at any age. A person can also select Medicare anytime if they have Lou Gehrig’s disease or amyotrophic lateral sclerosis.
How does Medicare Work?
There are many parts to a Medicare plan. When you are eligible for Medicare, you can get your health coverage through a government-run program or a privately run Medicare Advantage Plan.
You are automatically put on the federal-run Original Medicare plan as soon as you become eligible for Medicare by virtue of:
- Turning 65
- Medicare-eligible disability enrollment
- End-stage renal disease which needs dialysis or kidney transplant, or
- Lou Gehrig’s disease
Original Medicare is very different from a Medicare Advantage plan. There are many parts to how Medicare works. Medicare Part A and B together form Original Medicare. It covers the basics.
If you need something more in terms of cover, then you need to select from Medicare Part C, Medicare D, and Medigap or Medicare Supplement Insurance. Here is a breakdown of all Medicare options.
What does Medicare Part A cover?
Medicare Part A can either be premium free or with a premium once you turn 65 years of age, depending on the years of work you put in. If by age of 65, you have worked for at least 10 years and paid Medicare taxes under Medicare-covered employment, then you automatically become eligible for premium-free Medicare Part A.
You can still enroll yourself in Medicare Part A after the age of 65 by paying monthly premiums. In case your spouse is eligible for premium-free Medicare Part A because of his or her work history, then there is a chance that your Medicare Part A enrollment could also be premium free.
Medicare Part A covers an array of services, such as skilled nursing, inpatient hospital and even home health care and hospice in some cases. However, it might come as a surprise to you that the extent of services does not cover every medical bill, but merely the basics.
Medicare Part A does not cover long-term care even when you need it. The care which you would be eligible for under Part A is very different from the care you would receive if you enroll yourself in a long-term facility or nursing home.
Medicare Part A cover does not include nursing care, which you might need. Even if skilled nursing facility care is covered, it is only limited to bare minimum personal tasks such as bathing and eating.
Certain home health services can be included in Medicare Part A coverage such as occupational therapy, speech therapy, speech-language pathology, and physical therapy.
You can be eligible for hospice care under Medicare Part A, if your doctor deems it necessary. This is usually in cases where a person is either terminally ill or has less than six months to live.
The hospice care, if approved, includes many care services such as doctors and nurses. It also includes physical and occupational therapy services and other hospice aid services. Symptom control prescription drugs and limited short-term respite for caregivers might also be included.
It is important for you to know that apart from the premiums, your Medicare Part A can come with additional costs such as copay, coinsurance, and deductibles.
Where Medicare Part A deals largely with inpatient and terminally ill people, Medicare Part B takes care of necessary outpatient services.
What is Medicare Part B all about?
There are many vital services included under Medicare Part B, such as doctor’s visits, ambulance services, laboratory tests and reports, medical equipment, preventative care, mental health care and other medically necessary outpatient services.
Medicare Part B mostly comes with monthly premiums. The amount depends on individual situations, and varies from year to year. Like Medicare Part A, you might incur extra costs here as well. It is important that you check with your doctor, medical provider or supplier for copay, deductibles, and coinsurance. These costs vary as per the service or item.
Medicare B covers you if you need medical equipment such as hospital beds or walkers. Medicare Part B covers only such durable medical equipment which has been rented or purchased from Medicare enrolled suppliers. Medicare might not cover you in case you buy or rent your equipment from a supplier who is not enrolled.
As stated earlier, Medicare Part B covers preventative health care. This includes annual screenings to detect health conditions. There are many preventative services which form a part of Medicare Part B, such as:
- Tobacco Cessation Counseling
- Nutrition Therapy
- Wellness Exams
- Disease Screenings
These preventative measures are taken to help ensure your good health and detect any condition in the earlier stages itself. Vaccines which form a part of Medicare Part B will include hepatitis B, pneumococcal, and flu shots.
Part B also covers a limited array of prescription drugs. Many medicines, including injectables and the ones given through IV, can be covered. These are the drugs which are usually administered by a doctor. For all other drugs, Medicare Part D can be signed up for.
Other options available
Apart from Medicare Part A and Medicare Part B, which form Original Medicare, you can also enroll in the Medicare Advantage Plan, Prescription Drug Benefits, and Medigap. Prescription Drug Benefits (also called Medicare Part D) and Medigap can work simultaneously with your Original Medicare. However, Medicare Part C or the Medicare Advantage Plan is another option to Original Medicare.
What is Medicare Advantage Plan?
Medicare Advantage Plans, or Medicare Part C, are provided by private insurance companies. They have to at least cover the same levels of benefits as provided under Original Medicare Part A and Part B. However, hospice care is not covered under Medicare Part C because it is still a part of Original Medicare.
A vital aspect to understand is that if you choose to take Medicare Part C, you are still a part of Medicare, which is a federal program. Even if you decide to pay private insurance companies for your Medicare Advantage Plan, you would still be required to pay premiums for Medicare Part B.
There are many types of Medicare Part C plans, some of which you might already be aware of, such as Health Maintenance Organization (HMO) plan and Preferred Provider Organization (PPO) plan. Medicare HMO and Medicare PPO plans are very similar to the ones with employer-sponsored group coverage.
The advantage of Medicare Advantage Plan is that apart from basic care, some of these might offer extra benefits as well. There are many Medicare Advantage Plans which offer prescription drug coverage, which fall under the Medicare Advantage Prescription Drug Plan. In such a case, you do not need to enroll in a separate Medicare Part D. Other Medicare advantage plans might offer routine vision and dental check-ups. Some might even offer hearing care and other wellness and preventative care services.
There are many Medicare Advantage Plans and some of them can be for as low as $0 in your area – you could have no fees but still qualify for a plan.
Medicare Part D or Prescription Drug Benefits
This part of Medicare covers other standalone drugs, which do not form a part of Medicare Part B. In case you have a Medicare Advantage Prescription Drug Plan, then you do not have to enroll yourself in this.
Original Medicare has only limited number of prescription drugs which get covered in inpatient and outpatient situations. However, with a Medicare Part D, you can make sure that your drug is covered. In case you take prescription drugs and are interested in getting them covered, then you need to make sure that your drugs are covered under the plan you are considering.
Medicare Part D and all Medicare Advantage Prescription Drug Plan maintain a formulary or a list of all covered drugs. This list is easily available online or with the plan contact center. The formularies are not fixed and can change anytime, but the Medicare plan always notifies you in such situations.
Medigap or Medicare Supplement Plan
This part of Medicare covers many out-of-pocket costs, which are not covered by other plans. Your deductibles, copays, and coinsurance costs can be covered if you have enrolled into Medigap. Medicare supplement plan also covers emergency healthcare services outside the country. There are many situations that fall under the purview of Medigap, and it is always advisable to consult your plan provider with all details beforehand.
How to choose a Medicare Coverage?
Choosing the right Medicare combination can be a tricky business. Before deciding on Medicare coverage, you need to consider various deciding factors. For instance, if you travel abroad frequently, you might want to enroll in Medigap. Medicare supplement plan will also help if you have many out of pocket expenses and doctor’s visits.
Original Medicare is suitable if you do not want to worry about provider networks. Apart from these factors, you might also want to consider extra benefits such as drug coverage and other situations unique to you. For example, you might need detailed routine visual tests on a monthly basis, for which you can sign up for a Medicare Advantage Plan to handle this.