Understanding Medicare: Your guide to the basics
Navigating Medicare can often pose an initial challenge in terms of knowing where to begin. Given its complexity, individuals aim to collect ample information to ensure they make a well-informed choice regarding coverage that aligns with their requirements. Our aim is to streamline the process of learning about Medicare, making it as straightforward as possible.
Medicare is a federal health insurance program designed to assist individuals who meet the eligibility criteria in covering their healthcare expenses. The coverage directly provided by the U.S. government is referred to as Original Medicare, which encompasses Medicare Parts A and B. While most individuals are not required to pay a monthly premium for Part A, a monthly premium is generally applicable for Part B. Additionally, when seeking care, individuals are also accountable for deductibles, copays, and coinsurance.
Parts of Medicare
Part A
Medicare Part A covers specific costs associated with hospital-related services, whether received during a conventional hospital stay, through home health care, or in a skilled nursing facility. This coverage encompasses expenses such as room charges, meals, and related items. Part A also extends to essential medical supplies and drugs provided in these circumstances.
It’s important to note that Medicare Part A does not include coverage for doctor fees, hospital fees considered medically unnecessary, and amenities like private duty nursing, in-room entertainment services (with separate charges), or personal care items such as razors and slippers.
Part B
Medicare Part B encompasses medical expenses such as routine visits to doctors, outpatient services, and specific diagnostic screenings. Part B might also cover certain medications administered during medical visits and a restricted range of outpatient prescription drugs under specific conditions.
Part C (Medicare Advantage)
A Medicare Advantage Plan, such as an HMO or PPO, stands as an alternative health plan under the Medicare umbrella. It is a potential option for individuals as part of their Medicare coverage. These plans, sometimes referred to as “Part C” or “MA Plans,” are presented by private companies that have received approval from Medicare.
When you become a member of a Medicare Advantage Plan, the plan becomes responsible for furnishing both your Part A (Hospital Insurance) and Part B (Medical Insurance) coverage. Additionally, these plans might extend supplementary coverage, encompassing aspects like vision, hearing, dental services, and health and wellness initiatives. In most cases, these plans also incorporate Medicare prescription drug coverage, commonly known as Part D.
Medicare pays a fixed monthly payment to the organizations that offer Medicare Advantage Plans. These entities are obligated to adhere to Medicare’s regulations. However, each Medicare Advantage plan can charge different out-of-pocket costs and have different rules for how you get services (whether you need a referral to see a specialist, or if you are limited to using plan-affiliated doctors, facilities, or suppliers (except in cases of emergency).
Part D (Prescription Drug)
Medicare Part D is the prescription drug benefit component of Medicare, rolled out in 2006 for people 65 and older. Medicare Part D coverage is offered through insurance and other private companies that have been approved by Medicare. It must be added onto to Original Medicare (Part A or B), or it can be included as part of a Medicare Advantage Plan.
Part D encompasses coverage for retail prescription medications, which can be acquired by either visiting a pharmacy or using mail-order services. To enroll in a Part D drug plan, you select a carrier and join their designated drug plan. Across most states, there are around 30 drug plans available for selection. The most effective approach to determining the most suitable plan for your needs involves conducting a Part D analysis through the utilization of Medicare’s prescription drug finder tool, typically facilitated by your agent.