Even if you’re not yet old enough to receive Medicare, you probably have some idea what it is: health insurance for senior citizens.
But that’s a simple explanation for a complicated system. In this blog post, we’ll look at the different parts of Medicare, what they do and how it differs from its sister program, Medicaid.
What is Medicare?
Medicare is a national health insurance plan created in 1966 as part of the same legislation as Medicaid. While Medicare was – and is –designed to cover people over 65, Medicaid covers lower-income people and people with disabilities.
Although it was later expanded, the original Medicare included Medicare Part A and Medicare Part B.
What is Medicare Part A?
This is the section of Medicare that provides hospital insurance and covers things like:
- Hospital services
- Limited home health and nursing facility care
- Inpatient mental health
- Hospice care
Most people are eligible for Medicare Part A without having to worry about premiums if they – or their spouse — have worked for at least 10 years at a job that deducted wages for Medicare from their pay.
However, Medicare Part A doesn’t pay for everything. Users will still need to cover deductibles, co-pays and co-insurance.
What is Medicare Part B?
Medicare Part B covers outpatient medical services such as:
- Doctor appointments
- Lab tests
- Ambulance services
- Outpatient mental health service
- Medical equipment such as walkers or canes
- Some prescription drugs, provided they’re given in an outpatient setting
- Some vaccinations
- Preventive screenings
Unlike Part A, Medicare Part B has a monthly premium, the amount of which can depend on things like when you enrolled in Medicare Part B, whether you get Medicare and Medicaid, and whether you receive retirement benefits.
Medicare Part B includes an annual deductible. For 2019, it’s $185. Once you hit the deductible, expect to pay 20 percent of the Medicare-approved amount for most services and equipment covered by Medicare Part B.
What is Medicare Part C?
Also known as “Medicare Advantage,” Part C allows you to get original Medicare benefits through Medicare-approved private insurers.
While Medicare Advantage plans are required to offer at least the same level of coverage you’d get from Part A and Part B, some Part C plans can include benefits that do more than original Medicare does, such as vision or dental care.
The costs for these plans can vary as well. Every Advantage plan has a yearly limit on out-of-pocket costs. Once you hit that limit, the plan pays for all of your covered costs for the rest of the year.
What is Medicare Part D?
This is Medicare’s prescription drug plan. It’s not part of the original Medicare. Like we said earlier, Part A and B might cover certain inpatient or outpatient drugs, but you’ll need a separate prescription plan to take care of the rest.
Most people will pay a monthly premium for prescription drug coverage. Different plans set different costs for medications, so you’ll want to research different options so you’re paying the least amount possible for your drugs.
Enrolling in the Medicare Advantage Prescription Drug Plan will give you Part A, B and D coverage in a single pan.
What are Medigap plans?
Sometimes called Medicare Supplement plans, these offer another level of coverage for Medicare recipients to fill in some of the gaps – copays, deductibles, co-insurance – that you’d otherwise have to pay for out of pocket.
You need to be enrolled in Medicare Part A and Part B to become eligible for a Medigap plan. Most states offer 10 different plan types, each given a different letter for different levels of coverage.
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