What is Medicare?*

Medicare is the federal health insurance program for people 65 and over; for disabled individuals who receive SSDI through Social Security; and those with Lou Gehrig’s (ALS) or End Stage Renal Disease. There are four parts to Medicare: A, B, C, D. The federal government administrates Parts A and B. This was the entire Medicare program in 1965 (when signed into law). Parts A and B are called Original Medicare. Parts C and D came into existence many years later. (Medicare approved) private insurance companies offer plans for Parts C and D.

Four Parts of Medicare

Part A (Hospital Insurance): Covers acute care hospitalization, skilled nursing care, and hospice. Part A is premium free if you’ve worked ten years in the United States and paid into Social Security. But Part A is not completely free. The deductible is $1,632 for a 60 day benefit period. If you’re readmitted 61 days later, you’re billed another $1,632. If you’re a patient for 61 continuous days or longer, you’re responsible for daily copayment amounts.

Part B (Medical Insurance): Covers services such as physician visits; laboratory work; diagnostic testing; outpatient surgery; emergency room; and ambulance. Medicare pays 80%. Your share is 20%. The standard monthly premium is $174.70.** The premium is deducted from your Social Security check. If you don’t receive Social Security, you’re billed quarterly. Part B comes with a $240 annual deductible. Unless you have employer insurance, or other credible coverage as defined by Medicare, you risk a lifetime penalty if you don’t enroll when first eligible.

Q. Can I get medical coverage with Parts A and B?
A. Yes, you can. But you’ll need a separate plan to cover the cost of your medications (Part D). If you want to reduce the cost of your medical coverage, opt for Part C or get a Medicare Supplement plan.

Part D: (Prescription Coverage): Covers prescription drugs and a number of vaccines. Every plan has a premium. Many come with a deductible. If you decline Part D, you risk a lifetime penalty unless you have employer insurance, or other credible coverage, as defined by Medicare. You must have Part A or Part B to enroll.

Part C: (Medicare Advantage): Medicare Advantage plans provide everything you receive with Original Medicare, but at a lower cost. For example, the hospitalization copay on some Medicare Advantage plans can be as low as $0. Physician visits are $0 or a relatively small amount. Many plans include prescription coverage. Medicare Advantage include benefits that Original Medicare doesn’t cover. Some examples are routine dental, hearing, vision and chiropratic care, gym memberships, and complimentary meal delivery after you’re hospitalized. The premiums on these plans can be as low as $0.

Medicare Advantage plans have provider networks. A network is formed when medical professionals, facilities, and medical companies establish a contract to do business with the plan. A network may limit the number of providers you want to see. For example, your primary care doctor, or specialist, may not be contracted with a plan you want to enroll in. You may have to choose another provider or enroll in a plan where your providers are present. This said, providers, the cost of your medications, and plan benefits may all line up.

Medicare Advantage plans may also limit the care you receive outside your service area. A typical service area is your county of residence. A typical limitation is covering emergency and urgent care outside your service area. Nothing else is included. In recent years, insurance companies have built in greater flexibility to Medicare Advantage plans. For example, some HMOs offer routine care, for a period of time, away from home. PPOs are a good choice for people who want a non-referral based plan, a large selection of contracted providers, and the option of routine care when traveling. You must have Parts A and Part B to enroll in a Medicare Advantage plan.

Medicare Supplement Insurance

Like Medicare Advantage, Medicare Supplement plans reduce the costs of Original Medicare. No provider networks. No limitations on care. They’re essentially a passport for medical care anywhere in the United States and its territories such as Puerto Rico. The provider (physician, facility) must accept Medicare. The monthly premiums are significantly higher compared to Medicare Advantage. This is because Supplement plans offer maximum access to medical care. Supplements do not include prescription drugs. You must have Parts A and Part B to enroll. For a detailed description of Medicare Supplement Insurance, go to my blog on this topic.

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**Depending on your income, your Part B premium may be higher. If you’re eligible for full Medicaid, or participate in a Medicare Savings Program, you won’t pay the Part B premium.