Let’s revist a basic topic – What is Medicare? Medicare is at the heart of numerous debates regarding cost, benefits, and eligibility. And, while millions of people rely on Medicare every year to help cover their health care related services, not everyone is a candidate for this program.
While most people are aware that Medicare benefits are available at age 65, what many are not entirely familiar with is what the Medicare program actually is, and which benefits are – and are not – included in this program.
Not having a good understanding of Medicare can lead to misconceptions regarding its coverage. This, in turn, can oftentimes equate to some big surprises for enrollees who end up having to pay out-of-pocket deductibles, copayments, and / or coinsurance charges.
Medicare is defined as the U.S. federal health insurance program for qualified individuals who are age 65 and over, as well as certain people who are under the age of 65 and who have certain types of disabilities and / or End Stage Renal Disease (ESRD).
There are several different “parts” of Medicare, and each provides different types of coverage. For example, initially established in 1965, Medicare Part A provides coverage for inpatient hospital stays, as well as some benefits for care that is received in a skilled nursing home. Part A of Medicare may also cover some home health care and hospice care services. For most Medicare recipients, Part A does not require a premium.
While the amount of this monthly premium used to be the same for all Medicare Part B enrollees, the amount is now based on how much income an enrollee earns. For many years, Medicare Part A and Part B were the only Medicare benefits available, and as such, these benefits are often referred to simply as “Original Medicare.”
In 2006, as a part of the 2003 Medicare Modernization Act, Medicare Part D was implemented. This coverage, which can be purchased from private insurance carriers (as versus directly via Medicare) offers coverage for prescription medication.
Unlike Medicare Part A and Part B, which provide the same coverage options to all enrollees, Medicare Part D coverage – as well as the plan’s premium – can differ, based on the specific plan and the insurer that it is purchased from.
In order to help with reigning in Medicare-related out-of-pocket costs, many people who are enrolled in Original Medicare will purchase Medicare Supplement insurance. This coverage can help with paying expenses like Medicare’s deductibles and coinsurance charges that would otherwise be the responsibility of the enrollee.
There are currently ten different Medicare Supplement insurance plans to choose from. These plans range from offering just a basic set of core benefits, to highly inclusive and comprehensive coverage options.
Medicare enrollees can choose to be covered by Original Medicare (and can also opt to purchase a Part D plan for covering medications). Or alternatively, beneficiaries can instead go with a Medicare Part C plan for their health care coverage.
Part C of Medicare – which is also referred to as Medicare Advantage – provides all of the coverage that can be secured from Original Medicare. But in addition, many of these plans may also offer additional benefits, such as coverage for dental, vision, and / or wellness services.
Many of the available Medicare Advantage plans are set up in a similar manner to HMOs (Health Maintenance Organizations) or PPOs (Preferred Provider Organizations). With the HMO model, for instance, it is required that the plan’s enrollees use health care providers that are listed in a particular network. Also, a primary care physician (PCP) must typically give approval before an enrollee can see health care specialists.
With the PPO model, care can be provided from doctors and other providers that are outside of the plan’s network. In this case, though, the out-of-pocket payment responsibility to the patient will usually be higher than if they use an in-network provider.
Those who have a Medicare Advantage plan can’t also buy a Medicare Supplement policy as you can’t have both at the same time. In addition, because many of the Medicare Part C plans offer prescription drug coverage, there is also no need to obtain a stand-alone Medicare Part D prescription drug plan.
Just like any other type of insurance coverage that you may be considering, there are some things to look for prior to joining Medicare. These can help you with deciding which of the available coverage options are right for you.
For instance, ask yourself some important questions like: Do you have specific doctors and / or other health care providers you’d like to use? Or, are you ok with relying on the providers who are listed inside of a particular network? Similarly, are additional benefits like dental and vision important to you? Or, would you rather take care of these services outside of your primary Medicare health care plan?
In order to help you better determine which of the different Medicare coverage options is right for you, Medicare provides a number of resources directly on its website. This Medicare resource material may be accessed via video, as well as through downloadable materials that can be printed or read directly online.
Not everyone is eligible for Medicare. But you may qualify for Medicare Parts A and B if you are a citizen of the United States (or you have been a permanent legal U.S. resident for at least five continuous years), and you also meet at least one of the following parameters:
If you would rather be covered by a Medicare Advantage plan, you must first already be enrolled in Original Medicare. In addition, you are also required to reside within the service area of the particular Medicare Advantage / Medicare Part C plan that you are interested in purchasing.
Once you have enrolled in Medicare, there is no need to sign up for benefits again every year. However, if you want to make a change to your coverage – such as moving from Original Medicare to Medicare Advantage or vice versa – you will have the option to do so.
For instance, if you are currently enrolled in a Medicare Advantage plan and you want to change to a different Medicare Part C option, you can simply join the new plan during one of Medicare’s enrollment periods. You will then automatically be disenrolled from your current coverage when the new plan’s benefits begin.
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Author Bio: Ben started Prepare for Medicare in 2014 to help people help people get objective answers to questions about Medicare. He’s held leadership roles at numerous Fortune 500 Medicare health insurers in product development, sales, marketing and strategy for over 20 years.