Millions of Americans talk about Medicare, but how many others know what it really is? While some might understand that it is indeed a health insurance program, there are so many other aspects that can be a bit confusing. Here, we discuss the details of the Medicare program, talking about each aspect of what it has to offer.
What is Medicare?
Medicare is the federal health insurance program that covers those aged 65 and older. It also covers those with permanent kidney failure requiring dialysis or a transplant, otherwise known as End-Stage Renal Disease and Lou Gehrig’s disease, as well as certain eligible people under the age of 65 who have disabilities. The program began in 1965, and was administered under the Social Security Administration, and is now administered by the Centers for Medicare and Medicaid Services. Over 65 million Americans are enrolled in the program.
Medicare has Different Parts
Medicare is not a one size fits all program. There are different parts of the program known as Parts A & B, Part C, and Part D, and each part helps to cover specific services.
Medicare Parts A and B
Medicare Parts A and B are also known as Original Medicare, and it is how most choose to receive their benefits. Sponsored by the Federal Government, Parts A and B are also known as Traditional Medicare or Fee-for-Service (FFS) Medicare.
With Original Medicare, those enrolled can choose to see any doctor in the country, as long as they are participating in the program. Those who choose a non-participating physician need to be aware that they are likely to incur out-of-pocket costs.
What does Part A specifically cover? Inpatient care in hospitals, critical access hospitals, and skilled nursing facilities are covered by Part A, as well as hospice and some home health care. Certain conditions must be met in order to receive these benefits. Coverage is based upon Federal and State laws, and national and local coverage decisions.
As for Part B, this covers doctors visits, durable medical equipment, and preventive health screenings. It must be kept in mind that Original Medicare does not provide coverage for all medical expenses, and beneficiaries typically pay a coinsurance for services received. Those enrolled in Parts A & B, the government directly pays for services, and there are limits on the amount that providers can charge.
Medicare Part C
Also known as Medicare Advantage, Part C is private insurance offered by Medicare-approved companies. Also included in the coverage are vision, hearing, and dental plans. Those who enroll will receive the same coverage offered in Parts A & B, as well as the additional benefits. While Medicare pays a fixed amount to the companies offering the plans each month, there are specific rules that need to be followed. Referrals may be required for specialists and patients may be required to only see doctors that participate in the plan. It is important to remember that the rules can change on a yearly basis.
Medicare Part D
Part D is optional, and helps pay for outpatient prescription drug coverage. It is offered to all Medicare recipients. Each plan has a list of drugs that are covered, and it is required that all plans cover at least 2 drugs from each drug category. In addition, Part D covers most vaccines, the exception being the vaccines that are covered under Part B. Part D must cover all drugs that are available in the categories for Anticancer drugs (except those covered in Part B), HIV/AIDS treatments, Antidepressants, Antipsychotics, Anticonvulsive treatments for seizure disorders, and Immunosuppressant drugs. Beneficiaries should be aware that Part D does not cover weight loss or over the counter medications.
Those who want to receive Part D benefits should know that it is not provided directly by the government – only by private insurance companies that have contracts with the federal government. Beneficiaries must enroll during approved enrollment periods, and must choose between a private Medicare Plan or a Medicare Advantage Plan with drug coverage. It is best for everyone to sign up for Part D when they first become eligible for Medicare coverage in order to avoid incurring possible penalties should they need to enroll in the future.
Medicare Supplement plans are private insurance plans that are offered to help pay some out of pocket costs not covered by Original Medicare. Also called Medigap, this policy only covers one person, so spouses must be aware that they will each need their own. Those with Medigap should know that Medicare will first pay its share of covered health costs before the Medigap policy pays its share. The patient may be left responsible for some out of pocket costs that are not covered. Policies are automatically renewed each year as long as the beneficiary continues to pay premiums.