An Overview of Medicare
Medicare was established in 1965 as a Federal Program that offers health insurance to people age 65 and over and/or people who may be entitled to or qualify for it. Medicare has 4 parts (A, B, C & D).
Original Medicare consists of part A (Hospital Insurance) and part B (Medical Insurance).
- Part A (Hospital Insurance) helps cover:
Inpatient care in a hospital
Inpatient care in a skilled nursing facility (not custodial or long-term care)
Home health care
Inpatient care in a religious non-medical health care institution
- Part B (Medical Insurance) helps cover:
Medical necessary doctor’s services, outpatient care, home health services, durable medical equipment, mental health services, and other medical services.
Many preventative services
Part C (Medicare Advantage Plan) is an “all in one” alternative to Original Medicare. These “bundled plans” include Part A, Part B and usually Part D. Plans may have lower out-of-pocket costs than original Medicare and most plans offer extra benefits that Original Medicare doesn’t cover, like vision, hearing, and dental. In many cases, you’ll need to use doctors who are in the plan’s network.
Part D (Medicare Drug Coverage) helps pay for prescription drugs you need. Even if you don’t take prescription drugs now, you should consider getting Medicare drug coverage. Medicare drug coverage is optional and is offered to everyone with Medicare. If you decide not to get it when you’re first eligible, and you don’t have other creditable prescription drug coverage (like drug coverage from an employer or union) or get Extra Help, you’ll likely pay a late enrollment penalty if you join a plan later.
There are two ways to get Medicare Drug Coverage:
MEDIGAP (Medicare Supplemental Insurance) Policies
Another option to consider is A Medigap (Medicare Supplemental Insurance) policy is private health insurance that is designed to supplement Original Medicare. This means it helps pay some of the health care costs (“gaps”) that Original Medicare doesn’t cover (like co-payments, co-insurance, and deductibles). If you are in Original Medicare and have a Medigap policy, Medicare will pay its share of the Medicare-approved amounts for covered health care costs. Then, your Medigap policy pays its share. (Note: Medicare doesn’t pay any of the costs for you to obtain a Medigap policy.) Also, a Medigap policy is different than a Medicare Advantage Plan (like an HMO or PPO) because those plans are ways to get Medicare benefits, while a Medigap policy only supplements your Medicare benefits.