Medicare is the Federal government’s publicly funded health insurance program primarily for citizens aged 65 and older. The program also serves younger people with certain types of disabilities as well as the healthcare needs of persons with End-Stage Renal Disease.
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The Three Parts of Medicare
The Medicare program is divided into three main departments to cover the three primary categories of medical and healthcare needs.
Part A
Medicare Part A is used to cover inpatient hospital visits, hospice care services, nursing facility services, and home health care services. Part A is the largest and most frequently used portion of the Medicare program. The coverage type it provides is called Hospital Insurance.
Part B
Medicare Part B covers services provided directly by a doctor. It also covers outpatient care in some cases, the cost of medical supplies, as well as certain types of preventative medical services. It provides a type of healthcare insurance known as Medical Insurance.
Part D
The last of Medicare’s three primary departments is Part D. This part of the program helps to cover the cost of prescription drugs. This type of insurance is referred to as Prescription Drug Coverage.
A & B Premiums
Most Medicare recipients do not pay a premium for Part A. For this reason, it is sometimes referred to as “premium-free Part A.”
Those who do not qualify for Part A may pay a monthly premium for Part A Hospital Insurance coverage. At the time of this writing, the maximum premium Part A recipients will pay is $506 a month. Those who have paid Medicare taxes for the last 30 to 39 taxable seasons will pay $278 a month for Part A coverage.
Everyone who receives Part B Medical Insurance must pay the monthly premium of $164.90 as of 2023. Those who fall into certain tax brackets will be required to pay an additional charge added to the premium.
Two Medicare Coverage Options
After enrolling, recipients may choose between two primary means of coverage: Original Medicare and Medicare Advantage. Each of these has subcategories of coverage that may be applied in certain situations to cover certain benefit gaps.
Original Medicare
This Medicare coverage option includes Part A and B. The patient pays for services as they are used as well as a deductible at the beginning of each year plus 20% of the cost of approved services. For drug coverage, patients who opt for this coverage plan will need to obtain Part D in addition to their Original Medicare plan.
Original Medicare pays for the majority of needs the average qualifying recipient will have. But there are things it does not cover. For services it does not cover, Medicare Supplemental Insurance, known as Medigap may be obtained. Medigap may be compared to coinsurance, deductibles, or copayments. One interesting example of a service Medicare does not cover that Medigap can cover is medical care rendered outside of the United States.
Medicare Advantage
This form of Medicare insurance is a plan approved by Medicare and provided by a private medical insurance company. This alternative coverage route usually offers bundled plans that contain the benefits of Part A, B, and D. The coverage that is similar to Medicare Part D is not always included but may be added when necessary.
Other additional plans may be accessed and bundled in when needed. These include vision care plans, dental, hearing, and more. The plans provided under this type of Medicare coverage are delivered on an annual basis and must be renewed each year at the start of the enrollment period.
Why Choose Original Medicare?
Original Medicare includes parts A and B with few or none of the additional forms of coverage that are available. It also does not include the prescription drug coverage provided by part D. But it has its advantages and makes good sense for many. These advantages include:
Access to more care providers: A wider care network is available
Supplemental Medigap access: The Medigap plan remains available
Savings programs: Eligible patients may qualify for many Medicare savings programs
Why Choose Medicare Advantage?
Last year, 48% of Medicare recipients chose Medicare Advantage plans, over Original Medicare, and this year that number is expected to rise. As we have seen, Medicare Advantage coverage is often more comprehensive than Original Medicare. But interestingly, some people may say that Medicare Advantage plans are bad, which is not true.
According to medical insurance advisors, as much as 66% of the services provided by Medicare Advantage come with no monthly premium, unlike Medigap coverage. This means those who are enrolled, who are healthy and do not use the program, do not pay anything. Many people believe this is the way medical care coverage should work. After all, If you aren’t using it, why are you paying?
