What is Medicare?
Are you familiar with Medicare? If you are an older adult, chances are you do. But if you’re unsure, we’ll go over it here. It’s important to understand all of your options when it comes to healthcare, and Medicare is one of those options!
People 65 and up, as well as those with certain disabilities, are eligible for Medicare, a federal health insurance program. It can offset the costs of seeing a doctor, going to the emergency room, and buying medicine.
There are four distinct Medicare sections. Different sections operate under different norms. We’ll review each part of what Medicare covers and how to enroll in the program. Let’s get started!
The Evolution of Medicare
President Lyndon B. Johnson signed the Medicare Act into law in July of 1965, establishing a national healthcare program for people aged 65 and older. The only options available at first were Part A, and Part B. Medicare was later expanded to cover younger people with disabilities and those with End-Stage Renal Disease.
Medicare is governed by the federal Centers for Medicare and Medicaid Services (CMS). Payroll taxes for Social Security and Medicare, Medicare premiums paid by enrollees, and federal funds fund the program.
Over the years, coverage had expanded and evolved to cover more people than it did when it began. As a result, Medicare has helped over 60 million Americans afford health insurance. Though Original Medicare (Part A and Part B) will cover the bulk of your healthcare costs, you may want to consider a supplemental plan to fill in the gaps.
The Four Parts of Medicare
What Does Part A Medicare Covers?
Medicare Part A pays for medical treatment patients receive while they stay in a hospital, critical care center, or nursing home (not custodial or long-term care). This program also partially subsidizes hospice care and some forms of home health care. However, there are requirements that must be met before you can receive these benefits.
Your semi-private room is paid for by Medicare Part A, but you are required to pay a deductible. On the other hand, Part A does not cover all hospital or clinical procedures that may be undertaken, such as outpatient operations. They might be included in Part B.
The average 65-year-old pays nothing for Part A. That is because you have paid taxes to prepay the premiums for your hospital coverage throughout your working life. In addition, Part A may be obtained for $0 if you have a spouse or ex-spouse who has paid Medicare taxes for ten years or longer. Even if you are not eligible for premium-free coverage, most people age 65 can still qualify for it — they would simply pay a high premium instead.
What Does Basic Medicare Part A Cover?
- Inpatient care in a hospital
- Inpatient care in a skilled nursing facility (not custodial or long-term care)
- Hospice care
- Home health care
- Medicare covers semi-private rooms
- Meals
- General Nursing
- Treatment-related medications and other hospital amenities.
What is Medicare Part B?
Medicare Part B pays for medical services that Medicare Part A does not cover, such as doctors’ visits, outpatient care, and other medical treatments. The standard premium is $170.10 per month for individuals making less than $91,000 a year and couples making less than $182,000 a year.
You would be uninsured for medical visits (including those who attend to you in the hospital) if you don’t have Part B. In addition, you would not be eligible for Medicare benefits for lab tests, preventative care, ambulance services, or outpatient surgery without Medicare Part B.
More significantly, Part B includes cancer treatment and dialysis. Again, these are extremely costly items that would be out of pocket without government-sponsored insurance coverage.
The Medicare Part B deductible in the year 2022 is $233. That is a $30 increase from the deductible of $203 that was in place in 2021. For services covered under Part B, Medicare generally reimburses 80% of the approved cost of care once the Part B deductible has been satisfied.
Part B premiums are established by Social Security and vary yearly. There is a disparity between the tax burdens of higher and lower income brackets. The IRS determines your Part B premium based on your modified adjusted gross income.
What is Medicare Part C?
Private insurance is provided by Medicare Part C, also known as Medicare Advantage. Insurance company, geographic location, and policy options affect how much an Advantage plan will set you back. With Medicare Advantage, you can get coverage for medical expenses that Original Medicare typically doesn’t pay. The Centers for Medicare and Medicaid Services (CMS) uses the term “Part C” to describe HMO (health maintenance organization), PPO (preferred provider organization), PFFS (private fee-for-service), SNP (Special Needs Plan, CSNP (Chronic Special Needs Plan and MSA (medical savings account) plan offered by private insurance companies.
Before joining a Part C plan, you must be enrolled in Part A and Part B. Part B premiums will still apply even if you find a $0 premium plan under Part C. In addition, you can only enroll in the plan if you meet the eligibility requirements and submit your application during the open enrollment period.
The Advantage plan will pay for your Medicare benefits after you enroll, rather than the government. Part C enrollment with Social Security is voluntary. Many people opt to purchase their Medicare Supplement insurance from a Medigap policy. A person who wishes to participate in a Part C Advantage plan is prohibited by law from purchasing a Medicare Supplement plan from an insurance carrier.
What is Medicare Part D?
Those 65 and older, those with disabilities, and those with end-stage renal disease are all eligible for Medicare, including a prescription drug coverage plan known as Medicare Part D. (ESRD). Part D is an additional voluntary benefit provided by private companies in conjunction with the federal government.
In 2006, our federal government launched Part D, and tens of millions of Medicare recipients enrolled to receive coverage for their outpatient medicines.
It refers to medications obtained at a pharmacy or ordered by mail order that you pick up yourself. You pick a carrier and enroll in their prescription plan, and that’s how you join up for Part D pharmaceutical insurance. There are about 30 different drug plans to pick from in each state. However, having your agent perform a Part D analysis with Medicare’s prescription drug finder tool is the best way to figure out which one is ideal for you.
What is Medicare vs. Medicaid?
Traditional Medicare, also called Original Medicare, is an insurance program for the general public. Whatever the person’s income, they are eligible to have Medicare. It is not only for those over 65 but also for dialysis patients and the disabled. Other hospital charges, as well as some costs covered by deductibles, are paid by patients. The federal government has Part A, and Part B. Part C and Part D are accommodated by classified insurance agencies, even though the government manages them.
Medicaid is for low-income individuals of every age to give assistance to pay for health services. There are different programs for low-income individuals. In addition, Medicaid is not the only form of help for low-income individuals. Occasionally a copayment is essential. However, for people who apply for Medicaid, you must comply with definite standards to qualify. These measures vary from state to state.
What Doesn’t Medicare Cover?
- Amplification devices for the hearing impaired (hearing-aid)
- Normal dental hygiene
- Maintenance of normal vision
- Outside the United States, medical treatment is not covered by Medicare
- Dentures
- Plastic surgery
- Experimental Treatment
- Massage therapy
