Understanding Medicare

 

Confused by Medicare? We don’t blame you.  Here is a basic overview:

Medicare is a health insurance plan for:

A. People over age 65

B. People under the age of 65 with certain disabilities

C. Any person with end-stage renal failure.

 

There are 4 different parts of Medicare labeled A-D.

Medicare Part A: Hospital Insurance

Medicare part A helps cover inpatient care in hospitals. This includes critical access to hospitals, inpatient rehabilitation facilities and long-term care hospitals. This helps cover skilled facilities such as hospice or home health services (not custodial or long-term care).

Medicare Part B: Medical Insurance

Medicare Part B helps cover doctor services and outpatient care. It can also help cover some preventative services to help maintain a person’s health and keep certain illnesses from getting worse. Generally it pays 80% of the Medicare approved amount for covered services after the Part B deductible has been met.

Medicare C: Medicare Advantage Plans

A way to get Medicare benefits through private companies approved by and under contract with Medicare. It includes Part A, Part B, and usually other benefits Medicare doesn’t cover. Most plans also provide coverage.

Medicare D: Prescription Drug Coverage

Medicare Part D is run by private companies approved by Medicare, which can either be Medicare Advantage Plans or seperate Medicare perscription drug plans. This helps cover the cost of prescription drugs, however each plan can vary in cost and drug coverage.

In 1900 the average life expectancy in the United States was 49 years. Today, data suggests that if we reach 65 years of age it is likely that we will live to 85. No questions about it: We’re living longer. However- spoiler alert- we’re adding more years of old age, not more youth. The truth is, when making retirement plans, we should also begin thinking about how we want to live those last 10-20 years of our life and the care associated with them. An important part of retirement planning is making sure you’ll be financially ready for possible long-term care needs. 70% of people age 65+ will need some form of long-term care and support in their lifetime.

One of the largest misconceptions is that Medicare will pay for long-term costs. It does not. While Medicare will pay for short stays in a nursing home and health insurance will cover a hospital stay and doctor’s visits, neither covers chronic long-term care needs. Another easy misconception is confusing the Medicare and Medicaid services. While they are both government programs that provide medical and health-related services, they serve different groups of people. Medicare is a social insurance program for the elderly and certain disabled Americans. Medicaid is a social welfare program where individuals are eligible for benefits based on their low income and disability status. 

A website that everyone should have is www.Medicare.gov. Here, you can click on “What Medicare Covers” to find more details on what coverage includes. Being an informed healthcare consumer will help you build the best quality of life for you and your family.

CLICK HERE to access the The official U.S. Government  2014 “Medicare & You Handbook” 

Learn better by listening? Check out this video overview of the parts of Medicare.

Published on September 26, 2013.