Medicare is a federal health insurance program which provides healthcare coverage for millions of Americans since 1965. Primarily, Medicare provides health insurance coverage for beneficiaries over age 65, but it also can cover disabled Americans. This guide will provide an overview of the program and will explore what services it provides.
Major Parts of Medicare
Original Medicare is organized into two major parts. Medicare Part A covers hospital stays while Medicare Part B handles services from health care providers. While Medicare is a comprehensive healthcare plan, it doesn't cover everything. The following breakdown will provide a brief description of the overall coverage.
Medicare Part A (Hospital Insurance)
Medicare Part A, primarily covers inpatient hospital care but also handles treatment at other kinds of health facilities. While Part A covers a significant portion of hospital-related expenses, beneficiaries may still be responsible for deductibles and coinsurance. Covered costs include:
- Hospital stays, (including rooms, meals, and nursing care)
- Nursing facility care (within limits)
- Hospice care for terminal patients
- Home health care if prescribed by a licensed health provider
Medicare Part B (Medical Health Insurance)
Part B provides comprehensive healthcare coverage and requires a monthly premium. In addition, beneficiaries may have to meet an annual deductible and pay a percentage of the Medicare-approved charges for services. Medicare Part B coverage includes:
- Health care provider services and office visits
- Lab tests and imaging services
- Vaccinations
- Preventative health screening
- Ambulance services
- Outpatient care
Costs Not Covered By Medicare Parts A & B
While Medicare is a comprehensive program, it does not cover every healthcare expense. Beneficiaries need to know what Medicare does not cover to plan for out-of-pocket costs. Services not covered by Medicare include:
- Most dental care
- Most eye exams, but does cover treatment of many eye diseases
- Long-term care such as nursing home care, assisted living, and custodial care
- Cosmetic surgery (unless it involves maintaining body function)
- Hearing aids, however some diseases which impair hearing can be covered
- Experimental care, treatments must be Medicare-approved. Therapies with unproven outcomes are not covered
Medicare Supplements: Medigap Plans
To address the gaps in Medicare coverage, many beneficiaries choose to purchase Medicare Supplement Insurance. These plans come from private insurers and may cover healthcare needs such as dental, vision, hearing and other needs not met by Original Medicare.
Medigap plans may also help cover deductibles, copayments, and coinsurance associated with Medicare. Technically, they include Medicare Parts A, B, C, D, F, G, K, L, M and N. Private insurers are not required to offer all 10 possible plans. Medicare Supplement Insurance allows beneficiaries to plan for many extra costs, which can be a boon to people with a fixed income.
Medicare Advantage Plans
Medicare Advantage, also known as Medicare Part C, represents an alternative to Medicare (Parts A and B). These plans are offered by private insurance companies approved by Medicare and meet patient needs not covered by Original Medicare. Medicare Advantage plans include:
- All the benefits of Medicare Part A and B
- May include prescription drug benefits (Part D)
- May include dental, vision, and hearing coverage
Medicare Part C replaces Original Medicare with multiple plans with coverage rules unique to each individual insurance provider. Medicare Advantage plans tend to reduce the costs of Original Medicare such as the 20% co-insurance requirements.
Medicare Part D (Prescription Drug Coverage)
Medicare Part D is a stand-alone prescription drug coverage program created by private insurance providers. It helps reduce the cost of medications for Medicare beneficiaries. Beneficiaries pay a monthly premium, a yearly deductible, and coinsurance or copayments for their medications. Each Part D provider will have different charges for medications. Medicare Part D plans are often included with Medicare Advantage plans.
Medicare provides comprehensive healthcare coverage to millions of Americans. Understanding Parts A, B, C, D, and Medigap plans can have a substantial impact on the health care available to older Americans. While Medicare covers a wide range of healthcare services, it doesn't cover everything. These additional costs can impair the quality of life for Medicare beneficiaries if they do not plan for them. Understanding the various coverage options available will be a key aspect of any elder care plan.
As the healthcare needs of beneficiaries evolve, they need to review their Medicare coverage and consider their options in light of changing circumstances. Every aspect of the healthcare equation changes over time, including available treatments, Medicare plans, Medicare regulations, benefit levels, and costs. Keeping abreast of Medicare benefits is a lifelong process.
