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Medicare Information

Written By: Austin Quinn

For decades, Medicare has provided health care for seniors 65 and older. Now, with a dizzying array of options and an elaborate system in place, many seniors wonder: which plan meets my needs? Each plan caters to specific needs such as hospital care, doctor appointments, and more, depending on the plan you choose. While this system may seem confusing at first, many seniors only face two choices: the Original Medicare plan (Parts A and B) run by the federal government, or a Medicare Advantage plan offered by private companies.

What is Medicare?

In 1965, President Lyndon B. Johnson signed a bill leading to the creation of the Medicare and Medicaid programs. These federal health insurance programs were the first of their kind and paved the way for assisted health care. As the years passed, the program grew in size and complexity. The government added new rules, benefits, discounts, and parts – including the most recent major addition, Part D.

The distinction between the two programs is simple. Medicare is a federal program available to all qualifying applicants who are age 65 or older or have a severe disability. Medicaid, on the other hand, is a state and federal program intended only for low-income participants.

What are the Differences Between Parts A, B, C, and D?

Each type of Medicare plan will help to pay for a different type of healthcare. Depending on the plan you choose, you may be able to receive assistance with inpatient hospital visits, prescription drugs, doctor’s appointments, outpatient services, home health care, and more. Let’s take a closer look at each of the four parts.

Part A –  By applying for Medicare, you will automatically be enrolled in Part A. Covering hospital stays, nursing care, and hospice care, Part A acts as your hospital insurance. Although you will be required to pay a yearly deductible before Medicare will cover any hospitalization expenses, you probably won’t need to pay a monthly premium.

Part B – This part will cover a portion of your doctor visits, medical equipment, outpatient procedures, some home health care, laboratory tests, rehabilitation procedures, mental health services, ambulance services, and X-rays. You are required to pay a monthly premium and also meet a small deductible before Part B will begin paying for expenses. Also, keep in mind that people with higher incomes may pay higher rates. However, if you receive Social Security benefits, you may not have to pay as much. Lastly, if you decide to opt out of Part B when applying for Medicare, you may have to pay extra if you change your mind.

Part C – Also known as Medicare Advantage plans, these plans are offered through private insurance companies. In order to enroll in a Part C plan, you must also enroll in Original Medicare. If you decide to enroll, you will be able to choose the plan you want directly from the private insurance company. All Part C plans must pay for the same services as Original Medicare, but many also cover dental and vision needs. Keep an eye out for these two types of Medicare Advantage plans: health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Usually, these plans will allow you to choose one doctor as your primary care provider. Any other doctor you see or hospital you visit will have to be within that plan’s network. If you see others providers outside the network, your plan may not be able to cover those costs at all.

Part D – As the most recent addition to the Medicare system, Part D can help you reduce prescription drug costs. Since Part D plans are offered by private insurance companies, you will usually need to apply for prescription drug coverage through your existing provider if you chose a Part C plan. Part D plans typically require a monthly premium, copayments for specific drugs, and an occasional deductible.

Coverage Gaps

Although Part D can provide advantages for seniors who take a number of medications, it’s important to still be aware of gaps in your coverage that can exist. When the combined cost of your prescriptions in any given year exceeds a certain threshold, you will need to begin paying for your medication as if you had no insurance. However, you will still need to pay your Part D monthly premiums at the same time. While recent laws have sought to give people with Part D new discounts on brand-name drugs and benefits such as low-cost catastrophic coverage, you should carefully evaluate the advantages and disadvantages of Part D before enrolling in the program.

Which Plan is Right for You?

Try to gauge what kinds of health care resources you will have several years down the road. If you expect to receive substantial retirement benefits, those resources should inform your decision. If you already have some form of health insurance from an employer or other source, you may want to opt out of Part B. Make sure to speak with your doctor about any existing medical issues you may have that may require certain types of specialized treatment. Before making any major decision, make sure to carefully assess your options.

 

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