What is Medicare?
Medicare is a federal health program for people 65 or older, or under 65 and disabled. To be eligible you must be 65 or older, or under 65 and disabled and a US citizen or legal resident alien. Medicare started in 1965, prior to that, most people had retiree coverage, or their families paid out of pocket for their health care. Original Medicare pays for services that are medically necessary, though in recent year there is coverage for preventative services.
Medicare Parts vs Plans
Medicare has Parts: A, B, C, and D. You may purchase plans from private companies to supplement or replace your Original Medicare. Original Medicare is a good base for but doesn’t provide out of pocket protection, prescription coverage or extra things like vision or dental coverage. If you want those things you will need to find a plan that covers those things.
Let’s examine the Parts of Medicare
Part A is the hospital insurance coverage under Original Medicare. It provides coverage things such as inpatient hospital stays, skilled nursing facility stays, home health, and hospice, after you meet your deductible. Part A typically is premium free after you have paid payroll taxes for at least 40 quarters. Part A can be purchased if you haven’t worked the 40 quarters for a monthly premium.
Part B is the medical insurance coverage under Original Medicare. It provides coverage for outpatient services, such as doctor visits, laboratory tests, emergency services, and preventative services to name a few. Part B has a monthly premium, that is typically deductible from your Social Security or Rail Road Retirement benefits.
Part C is not part of Original Medicare. Part C is called Medicare Advantage, administered by private companies. Medicare Advantage plans are in place of Original Medicare. The Medicare Advantage company then administers your Medicare benefits. MA plans typically are all inclusive. That means your hospital, medical, and prescription coverage. You may also get things such as vision coverage.
Part D is the prescription part of Medicare. Part D is not part of Original Medicare. You can purchase prescription coverage from private companies either as a stand-alone plan to go along with Original Medicare or as part of a Medicare Advantage plan. There are several Part D plans on the market, that vary by monthly premium, deductible, formulary, and copays. These plans, coverage limits and formularies change annually, so it pays to shop around for the plan that fits your prescription needs and budget.