What you need to know about Medicare
Millions of Americans rely on Medicare to cover their healthcare needs. Understanding the various parts of Medicare and its supplements can be tough so let’s clear up how Medicare works.
Medicare was created in 1965 to provide health coverage for Americans age 65 and older. The program was expanded in the early 70s to cover younger Americans with permanent disabilities.
There are many different parts to Medicare, sort of an alphabet soup, so we’ll attempt to break it down:
Original Medicare (Parts A & B)
Medicare Part A covers hospital costs – inpatient care or skilled nursing facility – although not long-term care. Part A also helps pay for hospice care. Medicare Part A has a deductible and coinsurance. Patients pay a portion of the bill, 20% and Medicare covers 80% but there is no limit on patient out-of-pocket costs
Part B covers doctor visits and other medically necessary services and supplies. That includes preventive services, ambulance, medical equipment, and a few types of outpatient prescription drugs. Medicare Part B requires a monthly premium.
If you’re over 65 (or turning 65 in the next 3 months) and not already getting benefits from Social Security, you need to sign up to get Medicare Part A and Part B. You won’t get Medicare automatically.
If you don’t sign up for Medicare Part B at 65 and later decide you need it, you’ll likely pay a penalty of 10% of the premium for each 12-month period that you delayed. you can avoid it if you had health insurance through your job or your spouse’s job when you first became eligible. You must sign up within eight months of when that coverage ends.
If you already get benefits from Social Security, you’ll get Medicare Part A and Part B automatically when you’re first eligible and don’t need to sign up.
What isn’t covered by Original Medicare?
The biggest potential expense that’s not covered by Original Medicare is long-term care, commonly known as custodial care.
Other expenses that Original Medicare doesn’t cover include:
Hearing aids and exams for fitting them, deductibles and co-pays, most dental care, routine vision care, overseas medical care,
To look up Medicare’s coverage rules and other types of care and procedures, go to Medicare.gov/coverage and use the “Is my test, item, or service covered?” tool. Also, see What Original Medicare Covers.
Part D Prescription Drug Coverage
Medicare Part D covers prescription drug costs. Plans are offered by private insurers and require a monthly premium
Medicare Advantage (Part C)
Medicare Advantage, also known as Medicare Part C, is a type of health plan offered by private insurance companies that provides the benefits of Parts A and Part B and often Part D (prescription drug coverage) as well. These bundled plans may have additional coverage, such as vision, hearing, and dental care. Unlike Original Medicare, Medicare Advantage plans have an annual limit on out-of-pocket costs. Medicare Advantage plans are typically HMOs or PPOs and are available only in certain areas
Medicare Supplement Insurance (Medigap)
A Medicare Supplement Insurance (Medigap) policy helps pay some of the health care costs that Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles.
Medigap policies are sold by private companies. Some Medigap policies also cover services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. Typically Medigap policies still don’t cover long-term care, vision, dental care, hearing aids, eyeglasses, or private-duty nursing. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs, then, your Medigap policy pays its share.
For more details on Medicare, Medicare.gov is a great resource. You can also contact an Ashford Insurance Agent at 817-952-3153. Using a broker to help you choose your Medicare coverage doesn’t cost you anything.
