Medicare Explained
Medicare is a government-issued health insurance program overseen by the Centers for Medicare and Medicaid Services (CMS) to cover medical costs for anyone over 65 and younger people receiving Social Security disability benefits.
There are four parts of Medicare, each covering different benefits: Medicare Part A, Part B, Part C, and Part D. Other supplemental types of insurance may work with Medicare to offer valuable benefits, though they are not considered part of Medicare.
Medicare Parts A and B (Original Medicare)
Medicare Parts A and B (also known as Original Medicare) are the two oldest parts of Medicare. They provide a wide range of inpatient and outpatient care, but they won’t cover every healthcare need. Medicare Part A concentrates on covering bills for inpatient medical care – this usually includes services received in a hospital, hospice, or skilled nursing facility.
Medicare Part B mostly focuses on covering bills for outpatient care, such as healthcare received in a clinic or doctor’s office. Medicare Part B also covers home services like home healthcare and equipment.
Original Medicare doesn’t cover prescription drugs, routine dental, nor routine vision. Medicare beneficiaries may decide to join a Medicare Advantage plan or purchase a Medicare Supplement to help control costs in ways Original Medicare doesn’t do.
Medicare Part C
Medicare Part C, also known as Medicare Advantage (MA), is a replacement for Original Medicare. MA is an all-in-one alternative to Original Medicare and may have lower costs. This plan also provides additional benefits. Some of the benefits offered by Medicare Part C include:
- Prescription drugs
- Routine hearing
- Routine vision
- Routine hearing
- Meal delivery
- Transportation to the doctor office
- House cleaning to reduce asthma attacks
There are several Medicare Advantage Plans, including Preferred Provider Organizations (PPOs), Special Needs Plans (SNPs), Private Fee-for-Service (PFFS), Health Maintenance Organizations (HMOs), and Medical Savings Account (MSA).
Medicare Part D
Medicare Part D provides prescription drug coverage. Medicare beneficiaries can either sign up for a stand-alone Medicare Part D prescription drug plan to supplement their Original Medicare coverage or get their coverage through the MA prescription drug plan.
Most Medicare beneficiaries pay a premium for Medicare Part D, along with other costs such as coinsurance and copayments. These costs vary among plans. Though Medicare Part D plan is optional, any beneficiaries that don’t enroll when they are first eligible for Medicare can face a penalty for late enrollment if they decide to opt for the coverage later on.
Medicare Supplement Plans
Medicare Supplements are not an official part of Medicare, but Original Medicare beneficiaries may want it. With Original Medicare, beneficiaries will be left with high out-of-pocket costs, including deductibles, coinsurance, and copayments. Medicare Supplement plans may cover part of these out-of-pocket costs.
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