If you are about to turn 65 or you have a disability, you should consider joining Medicare so you have health coverage and can save money in the future. There are some aspects of it that can be a little bit confusing, so in this article we will explain some of the basic information about it with the purpose of helping you in the process of joining it.
What is Medicare?
Medicare is the national social insurance program administered by the U.S federal government and it is funded by a payroll tax, premiums and surtaxes from beneficiaries, and general revenue. This federal health insurance program is for people who are 65 or older, younger people with disabilities and people of all ages with End-Stage Renal Disease.
What does Medicare cover?
Medicare is divided in different parts which cover specific services. There is Original Medicare, in which the person pays a set amount for her or his health care (deductible) before Medicare pays its share. Then, Medicare pays its share, and you pay your share (coinsurance or copayment) for covered services and supplies. There’s no yearly limit for what the persons pays out-of-pocket. Original Medicare is divided in Part A and Part B, and it is managed by the federal government.
- Part A, which is Hospital Insurance, covers the costs of the person’s care if he or she is hospitalized, like skilled nursing facilities and critical access hospitals. It also covers hospice care and some home health care. Beneficiaries do not pay a premium for Part A if they (or a spouse) paid into the Social Security pool for at least 10 years while working.
- Part B, which is Medical Insurance, covers doctors’ services and outpatient care. It also covers other costs that Part A does not cover, like medical supplies, physical and occupational therapist and preventive services (blood testing, screenings, etc). To have Part B, people must pay a monthly premium.
Even though this is the coverage you get from Original Medicare, a lot people get other types of Medicare to help them save money and reduce out-of-pocket costs, especially if they are not working anymore and they do not have employer coverage. To get them you must pay a monthly premium and they are usually sold by private insurance companies. These other types of Medicare are:
- Part C, also known as Medicare Advantage Plans, is an alternative to Part A and Part B. These plans are managed by private insurances through Medicare. Their benefices vary a lot depending on the plan you get, but they must cover at least the same costs of Part A and Part B. The best plans cover costs such as prescription drugs, hearing and vision care, dental care or coverage outside the U.S. Depending on the plan the person gets, there can be another requirements, like only using the services of certain hospitals.
- Part D, which is Prescription Drug Coverage, is provided by private companies and the person must pay a monthly premium. This will help
- Medicare Supplement Plans 2019, also known as Medigap, help cover some services that Original Medicare does not cover, like copayments, coinsurance, deductibles. Medigap does not have prescription drug coverage and if you have one of these plans you cannot have Medicare Advantage and vice versa. The benefices you get depend on the Medigap policy you choose.
Bear in mind that the plans mentioned above vary depending on the state you live in and not all plans are available in all the states. The same goes with the private insurance company you choose. The plans available for you will depend on the company you choose and the cost will also depend on the company, so compare prices in different places before getting a plan.