Medicare Insurance Coverage: What is Medicare Insurance?
If you're just looking into Medicare for the first time, it can often be confusing. The federal government hasn't necessarily done the best job as far as providing resources and information about various Medicare coverage plans, how they affect your social security, and other issues and questions.
If you've been struggling to understand the ABCs of Medicare, we're here to help you break through the confusion so that you can make sure that you can enroll in to the best Medicare plan for you!
What's The Difference Between Medicare And Medicaid?
Many people still don't know the difference between Medicare and Medicaid. They both sound the same, so what's the difference?
Both are federal health insurance plans designed to give affordable or no-cost health insurance to qualifying individuals who are unable to pay a premium for private insurance plans. The main difference is that traditionally Medicare covers benefits for those over 65, while Medicaid is a free or low-cost insurance plan designed to provide basic coverage and benefits for low-income people.
Medicare Eligibility
Although the Medicare program primarily provides coverage for seniors, there are a few other extenuating situations that would allow somebody younger to be eligible for Medicare services. These include:
Younger individuals who have disabilities or a serious health condition.
Those who have already been given their social security benefits.
Individuals who benefit from the Railroad Retirement Board's disability program.
Patients who are on kidney dialysis or who need a kidney transplant.
Keep in mind that by the time most people reach their 50s and 60s, they've been paying into Medicare for their entire life out of each paycheck and their annual taxes. The Medicare health insurance plan is closely tied to your social security benefits and is a program that every American worker and business owner pays taxes into for the benefit of society.
What Does Medicare Cover?
Medicare has 5 main healthcare plans for seniors that are 65 or older as well as people with disabilities and several chronic health conditions, in a nutshell:
- Medicare Part A covers basic hospitalization.
- Medicare part B provides coverage for doctor visits, diagnostic tests and their likes.
- Medicare Part C (also called Medicare Advantage) combines both Medicare Part A and Medicare Part B coverage with additional benefits.
- Medicare Part D covers prescription drugs.
- Medicare supplement plans such as Medigap are private coverages and it covers out-of-pocket expenses such as co-pays, co-insurance, and deductibles.
Original Medicare vs Medicare Advantage
When Medicare was first created, there were two parts- Medicare part A and Medicare part B. Medicare part A covered hospital visits, ambulances, and emergency care, whereas Medicare part B primarily covered specialist care and covered a broader scope of conditions.
Many people are still on this plan and it is referred to as Original Medicare since the health coverage plans haven't changed much since the program started. The only addition to Original Medicare plans is that they now include Medicare part D, which helps to pay for prescription drug costs.
What is Medicare Advantage
In 1997, former President Bill Clinton signed the Medicare + Choice Act, which was eventually renamed Medicare Advantage (or Medicare part C). Essentially this provided the same benefits as Medicare part B and Medicare part A, but allowed beneficiaries to enroll through private insurance plans if they wished to receive better coverage.
Can I Drop or Change My Medicare Advantage Plan?
Should you ever wish to drop your MA plan or enroll in a different plan, then you just need to apply for your new plan during the Medicare open enrollment period from January 1 to March 31. As long as you meet the deadline, your old policy should automatically switch to the new policy when your last one ends. If you wish to switch from an MA plan to Original Medicare, then you'll need to apply through the social security website or give them a call to discuss options.
What's The Difference Between Medicare Part A, B, C and D?
Here's a full breakdown of the differences in coverage between the 4 parts so you can better understand each.
Medicare Part A: Hospital Insurance
Medicare part A is the most basic form of U.S. government insurance. It's designed to mainly cover emergency costs such as hospitals, emergency room treatment, and ambulance rides. Additionally, it also covers short-term stays in nursing facilities as well as a bit of in-home medical treatment for those with eligible disabilities.
Medicare Part B: Medical Insurance
While part A is designed to pay for medical emergencies and essential care, not all conditions require emergency care. Medicare Part B covers all of the things that part A doesn't. For example, if you need outpatient care or physical therapy after your emergency surgery, then this would be covered by part B.
Part B insurance will help pay for the costs of certain specialist doctors (e.g., spine doctor, E.N.T. doctor, gynecologist, etc.) that still provide vital services. Medicare Part B will also help you pay the cost of high-quality medical equipment such as wheelchairs, canes, walkers, or even hospital beds.
Medicare Part C: Medicare Advantage Plans
The Medicare Advantage plan has all of the benefits of part A and part B, with one big difference- it allows individuals to receive Medicare benefits through enrollment in a private health insurance plan. Medicare
Typically referred to as Medicare part C or an MA plan, these plans work almost exactly the same as a typical private health insurance plan. They are often given to individuals who have worked with a long-standing company that pays for their insurance.
Those who need specialty medical treatment may also enroll in an MA plan so that they can get access to a larger network of doctors than those provided by typical treatment centers for Medicare. Ultimately Medicare Advantage was created to give patients more choices and connect them with the specialists they need.
Medicare Part D: Prescription Drug Coverage
Medicare part D is also covered under the Original Medicare plans, along with part A and part B. If you've ever had to pay full price for prescription drugs at your local pharmacy, then you know just how expensive they can be. In some cases, life-saving medication would cost thousands of dollars per month without coverage.
Part D provides prescription drug coverage to individuals who have been prescribed necessary medicine by their primary care doctors. Although it doesn't cover a huge amount, it will typically cover between 20 and 30% of the total costs.
