What exactly is Medicare and how does it work?
Medicare is a federal health insurance program primarily designed for people age 65 or older and younger people who are eligible for medicare due to certain disabilities and End Stage Renal Disease.
Medicare health coverage dates back to 1965 when President Lyndon B. Johnson signed Medicare and Medicaid into law.
The original components of Medicare consisted of Part A and Part B, which today are known as “Original Medicare.” Original Medicare Parts A and B offer hospital insurance (Part A) and medical care insurance (Part B).
In 1972, Medicare expanded to provide coverage for the disabled and people with End Stage Renal Disease requiring dialysis or a kidney transplant. Medicare continued to evolve over the years.
Medicare Part C plans — known as Medicare Advantage plans — allow Medicare beneficiaries to receive their benefits through private health plans.
Medicare Part D prescription drug plans (and many Medicare Advantage plans) provide prescription drug coverage.
Learn more about Medicare eligibility and requirements for enrolling in Medicare.
Medicare is made up of four parts. These are labeled as Part A, Part B, Part C and Part D.
Parts A and B are provided by the federal government, while Part C plans and Part D plans are sold by private insurance companies.
Part A of Medicare provides coverage for stays in a hospital, skilled nursing facility, hospice care and limited home health care.
Part B of Medicare covers doctor’s appointments, medical services, medical supplies and preventive care, among other services.
Part B requires monthly premiums. The standard Part B premium in 2019 is $135.50 per month.
Medicare Advantage is an alternative to Original Medicare. Instead of receiving Medicare benefits from the traditional government fee-for-service system, you receive your benefits from one of many private health insurance plans.
Medicare Advantage plans are required by law to cover at least the same benefits that are offered by Original Medicare.
A Part C Medicare plan may also provide additional benefits that Original Medicare doesn’t, like dental care, vision and prescription drug coverage.
Medicare Part D provides prescription drug coverage.
You can receive prescription drug benefits two ways — through a Medicare Advantage plan that covers prescription drugs or through a standalone Prescription Drug Plan that can be used with Original Medicare or with a Medicare Advantage plan that doesn’t offer drug coverage.
Medicare Supplement Insurance (also called Medigap) is a type of plan sold by private insurance companies that provides coverage for some of the out-of-pocket costs that Original Medicare doesn't pay for.
These out-of-pocket costs include deductibles, coinsurance, copayments and more.
Medicare can work in a similar way to other forms of health insurance, such as employer-sponsored group plans.
When you need care, you typically want to visit a health care provider who accepts Medicare.
There are three categories of providers as it relates to Medicare acceptance:
When you visit a provider who accepts Medicare patients, you will first have to reach a deductible before your coverage kicks in (Part A and Part B each have a separate deductible).
Once your deductible has been met, you will then typically be charged copayments (a flat fee) or coinsurance (a percentage of the bill) for your covered care.
If you are a U.S. citizen or permanent legal resident of at least five consecutive years, you are eligible for Medicare Part A if you meet one of the following criteria:
Eligibility for additional parts of Medicare typically require Part A enrollment.
Medicare-covered services and different parts of Medicare can include a number of expenses, depending on the services you receive and the type of coverage you have.
If you’d like to discuss your Medicare Advantage plan options, call to speak with a licensed insurance agent today.
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