WHAT IS MEDICARE?

What is Medicare?

Medicare is a federal program that offers health insurance to American citizens and legal permanent residents that live in the United States for five or more years in a row.

Who is eligible for Medicare?

You may qualify for Medicare if you meet one of the following requirements:

  • Age 65 or older
  • Under age 65 with a qualifying disability and have received 24 payments of Social Security Disability Insurance benefits.
  • Any age with a diagnosis of end-stage renal disease.
  • Any age with a diagnosis of Amyotrophic lateral Sclerosis (ALS), also known as Lou Gehrig’s disease.

What does Medicare cover?

There are five basic parts to Medicare: Parts A, B, C, and D, and Medicare supplement insurance (Medigap). Each part helps pay for different types of health care services. There may also be certain costs for some of these parts that you may have to pay. How much you pay depends on the coverage you choose and the health care services you use. The parts of Medicare are like building blocks. They can be put together in different ways to provide the coverage that best meets your budget and health care needs.

Let’s review the Medicare parts in detail.

Medicare is commonly referred to as Original Medicare and is made up of two parts - A & B.

Part A is hospital insurance. It covers care you receive while an inpatient in a hospital or skilled nursing facility. Part A also covers hospice care and certain home health services.

You do not have to pay a premium for Part A if you or your spouse worked and paid Medicare taxes for at least 10 years or 40 quarters. If you paid Medicare taxes for less than 30 quarters, the standard Part A monthly premium for 2019 is $437. If you paid Medicare taxes for 30-39 quarters, the standard Part A monthly premium is $240

Part B is medical insurance. It covers doctor visits, clinic services and care you receive as an outpatient. Unlike Part A, most people pay a monthly premium for Part B, which may vary from year to year and depend on your situation. The standard 2019 Part B monthly premium is 135.50.

It’s important to understand that Original Medicare does not cover all health care cost and it does not cover prescription drug cost. There are deductibles, copayments and/or coinsurance costs that you may have to pay with Medicare Parts A and B coverage. You have the option to get additional coverage through private insurance company plans. Below are some of those options.

Parts C and D are offered through private insurance companies.

Part C is also known as Medicare Advantage plans. These plans combine the coverage of Parts A and B into one plan. Medicare Advantage plans provide Original Medicare coverage through Medicare approved private insurance companies and often include benefits not covered by Original Medicare such as routine dental and vision, wellness programs, hearing care, and prescription drug coverage.

It’s important to understand that you’re still enrolled in Medicare when you have a Medicare Advantage plan; you’re just choosing to get your coverage through a Medicare approved health plan instead of through the federal health insurance program. Because of this, you’ll need to keep paying your Part B premium, in addition to any required premium for your plan. Some service areas may offer Medicare Advantage plans with premiums as low as $0; however, even in this case, you’d still need to pay your Part B premium.

Part D is prescription drug coverage. These plans help pay for medications. You can get a standalone Part D plan or (as mentioned above) get a Medicare Advantage plan. The convenience of the Medicare Advantage plans is that they provide all of your Medicare Parts A, Part B, and Part D benefits under a single plan.

When choosing Medicare Part D coverage, it is important to make sure that the plan you’re considering covers your current medications. Every Medicare Prescription Drug Plan and Medicare Advantage Prescription Drug plan includes a formulary, and you can typically find this information online or you can contact the plan.

Medicare Supplement Insurance plans - (also known as Medigap) help pay some of the out of pocket health care costs that Original Medicare (Parts A and B) does not pay. These plans do not require referrals and have no network restrictions so you can see any doctor. Medigap Plans are offered through private insurance companies and are regulated by federal and state laws.

There are 10 standardized Medicare supplement insurance plans, labeled “A” through “N.” (These letters are not related to the Medicare Parts A, B, C and D labels.) Each standardized plan with the same letter must offer the same basic benefits, no matter which insurance company sells it. The only difference between Medicare supplement plans with the same letter sold by different insurance companies is usually cost. Medicare supplement plans do not include prescription drug coverage so you will most likely need to purchase a Medicare Part D prescription drug plan. You cannot be enrolled in a Medicare Advantage plan and Medicare Supplement plan at the same time.