Medicare Facts – what you need to know
Learning about Medicare can be overwhelming. Here are some basic facts to get you started.
You’re probably familiar with Medicare – at least the basic idea – but what else do you need to know regarding Medicare facts? Medicare plans are labeled alphabetically, but with so many options and configurations, it’s simply not that easy to choose the best plan for your own health care.
What is Medicare, exactly?
It’s a federal health insurance program that is funded mostly by payroll taxes. Take a look at your paycheck and you’ll see a dollar amount going to Medicare.
The non-technical definition? Medicare is one of few health insurance options you have once you retire. It’s going to help you pay for things like doctor’s visits, hospital stays and surgeries.
You’re eligible for Medicare if you’re over age 65, a U.S. citizen or legal resident, or the spouse of one. You must have worked in the U.S. long enough to be eligible for Social Security or railroad retirement benefits.
So what is this ABC thing?
- Hospital coverage a.k.a. Medicare Part A: This is the first part of the duo of traditional (or basic) Medicare. It covers things like inpatient hospital stays, home health care visits and skilled nursing facilities.
- Medical coverage a.k.a Medicare Part B: The second half of the duo, Part B, covers most of the Medical stuff you’re going to use like doctor visits, outpatient medical services which are services received without being admitted to a hospital, and diagnostic screenings used to detect disease.
Medicare Parts A and B are provided by the federal government. These benefits are yours. Remember that dollar amount on your paycheck? Well you’ve paid Medicare over the years through taxes on your own hard work. Still, it doesn’t cover everything, which means…
You’ll have to pay:
- Deductible: the amount you must pay before your insurance begins to pay
- Coinsurance: the amount you pay after you’ve met your deductible
- Monthly premium: the amount you pay for insurance each month
I’ve seen members misunderstand the benefits and end up spending unnecessarily on their care. Don’t learn the hard way. What’s really important is to understand what’s covered and NOT covered by Parts A and B. Check out What Medicare covers for some quick answers about what’s covered and not covered.
So where do the other Medicare plans come in?
It’s fair to say that Parts A and B will probably not cover all of your medical costs. Private health plans cover some services that A and B don’t, like outpatient prescription drugs, routine eye and dental care and hearing screenings. There’s going to be deductibles and coinsurances you’ll have to pay when you get health care.
Here’s the quick scoop on the additional Medicare plans:
- Part C: Medicare Advantage Plans. Run by private health plans, Part C provides all of your Part A (hospital insurance) and Part B (medical insurance). These plans often offer additional benefits and usually have lower out-of-pocket costs than traditional Medicare. You’ll have one insurance card that covers everything.
- Medicare Cost Plans. Offered by private health plans. The plan covers all Part B (medical) services, and often includes additional coverage for Part A (hospital) services, as well as other benefits like prescription drug coverage (Medicare Part D). The plan is available in certain areas of the country.
- Medigap (Medicare supplement) plans. Offered by private health plans to fill in the coverage “gaps” left by Medicare. These supplemental plans pay some or all of the expenses not covered by traditional Medicare Parts A and B.
- Part D: Prescription drug plans. This is prescription drug coverage set-up to work with the plan of your choice, whether you go Traditional Medicare or opt for a private Medicare Advantage or Cost plan. Part D is only offered through private health plans.
How should you get started choosing?
Get comfortable with Medicare. Think about the amount of care you’re getting now to better understand the type of care and coverage you may need in the future. Medicare is one of those things that will probably require some human interaction to truly understand. Talk to private insurance companies about their plans and press them to help you understand all of your options.
Make sure you choose a plan, and a company, that fits your lifestyle, health needs and offers service and support you need. It may not be as easy as ABC, but there’s plenty of resources and companies available to help you with your search.