Medicare Basics

Medicare is a government-issued health insurance program administered by the Centers for Medicare and Medicaid Services, or CMS. Servicing almost 50 million American citizens, Medicare is the largest health insurance provider in the nation.

Medicare is made up of four parts that each cover difference services: Part A, Part B, Part C, and Part D. Parts A & B are administered by the government, while Parts C & D are administered by private insurance companies.

There are several factors to consider when making health insurance choices. Having even a basic knowledge of Medicare and how it functions will enable you to choose a plan that is a good fit for you.

Medicare Part A

Part A is one part of original Medicare and covers inpatient hospital and skilled nursing care, hospice care, and home health care.

Most Part A members do not pay a premium for Part A if they or their spouse have paid Medicare taxes while working for at least 40 quarters (10 years).

Medicare Part B

Part B is the other part of original Medicare and covers medical services such as doctor visits and services that are needed to diagnose or treat medical conditions. Part B also covers preventive services as well as things like clinical research, ambulance services, durable medical equipment and limited outpatient prescription drugs.

Medicare Part C

Medicare Part C is also referred to as Medicare Advantage Plans. By law, a Medicare Advantage Plan must provide all the benefits of original Medicare but may include additional benefits not covered by Medicare, such as prescription drug coverage, hearing aids, vision, and dental. Medicare Advantage plans take the place of original Medicare and are administered by private insurance companies. You must be enrolled in Medicare Part A and B in order to enroll in this type of plan.

Medicare Advantage Plans are offered in specific service areas throughout the country. An individual must live in the plan’s service area in order to enroll in an Advantage Plan.

Medicare Part D

Medicare Part D is prescription drug coverage insurance. Prescription drug plans function similarly to employer or group coverage with the exception of the coverage gap or “donut hole,” which is part of every Medicare Prescription Drug Plan. The coverage gap is a change in the plan’s coverage once specific costs have been reached by the beneficiary and the insurance company. Generally, more expensive name brand medications cause a person to enter the coverage gap.

Medicare also offers a program called Extra Help, which can help pay for some to most of the costs associated with Medicare prescription drugs. This is a program for people with limited income and resources. You can determine your eligibility for Extra Help at www.ssa.gov.

Medigap or Medicare Supplement

Medigap plans work with original Medicare and can pay the portions Medicare does not cover, such as coinsurances and deductibles. You must have Medicare Part A and B in order to enroll in this type of coverage. Medigap plans do not cover prescription medications.

There are several standardized Medigap plans, each having individual benefits and rates concerning emergency care, coinsurance, copayments, etc. Working with a trusted and licensed Medicare insurance broker is the easiest way to choose a plan that is right for you.

Eligibility

Eligibility for Medicare is based on numerous factors. You may be eligible if:

• You are least 65 years old and you or your spouse have worked in a Medicare covered career for at least ten years.
• You have received disability Social Security benefits or Railroad Retirement Benefits for two years.
• You have Lou Gehrig’s Disease
• You are diagnosed with End-Stage Renal Disease and require kidney dialysis or transplant.
• You currently are enrolled in Medicare Part A and B and seek additional coverage.

How to enroll

The easiest way to enroll in additional Medicare insurance is through a trusted and licensed Medicare insurance broker. However, there are considerations you can make on your own:

1. Compile information about your current health insurance needs and drug coverage. Write out a list of all medications and dosages you currently take.
2. Make a list of what you expect out of your insurance coverage. This will help you compare policies in an organized manner.
3. Make a list of any providers or facilities you wish to use.
4. Compare policies on Medicare.gov.
5. Review your qualifications and determine if you are eligible for further financial assistance.

Why Medicare

The following are several reasons why Medicare may be a good choice for you during retirement: 

• Original Medicare (Parts A & B) is good health insurance: Copays and coinsurances are reasonable (generally 80%/20% after deductibles)
• Medicare Advantage plans can improve Original Medicare by adding additional benefits such as prescription drug coverage
• Medicare Supplement or Medigap plans supplement Original Medicare’s coverage, closing the gaps in Original Medicare
• Medicare Supplement and Medicare Advantage plans can be very cost effective and comprehensive when compared with other types of coverage