Medicare came into being in 1965 when President Lyndon Johnson after signing HR 6675. However, the first lot to receive coverage from the program did so in 1966. The Centers that support both Medicare and Medicaid Services fall under the Medicare management. Medicaid and Medicare should not be confused with each other. Medicaid is a service that provides health insurance for Americans with low incomes.
Medicare’s inception was to cater to the health needs of seniors’ aged 65 and above. Some individuals below 65 may also benefit from the program when they are already receiving Social Security or the Railroad retirement board benefits. People receiving disability insurance and even those with end-stage renal disease and ALS are also eligible before they turn 65.
This Medicare for Dummies 2018 article will take you through the components of Medicare and the basic principles around which they work. By the end of this read, you should be able to know what constitutes Medicare and the other options to Medicare. You will also have an idea of some of the costs that come with the plan.
What are Medicare Part A and Part B?
Part A is the Medicare that covers your Hospital Insurance. It caters for your inpatient stays in a hospital or Skilled Nursing facility as well as hospice care. In some instances, Part A can also cover home care for certain conditions. Medicare part A can be premium free when you have worked for ten years before taking it up. Anyone that has not worked for more than ten years will pay a premium dependent on the number of years worked.
Medicare Part B is Medical insurance and is coverage for outpatient services such as doctor’s visits, outpatient surgeries, and preventive services like vaccinations. Part B may also cover durable medical equipment which may include; wheelchairs, walkers, crutches and even beds recommended by your doctor. Part B attracts a premium, and the amount you pay relies on your income amount.
Medicare part B attracts copayments, coinsurance, and deductibles. A copayment functions as a pre-determined fixed amount of money that you pay out of pocket when you visit a health facility. Coinsurance functions similarly to a copayment but is a percentage instead of a cash amount. Deductibles are payments that you make on your own before the insurance cover starts paying. Medicare’s deductible is $1,316 per benefit period.
Medicare only caters for the first 90 days of your hospital stay in each benefit period. A benefit period begins when you start your hospital stay. The end of the benefit period occurs when your hospital stay ends or when you do not use hospital facilities for a 60 day period. It is important to note that benefit periods are not dependent on calendar years. At the end of your ninety-day stay, you can use your lifetime reserve days. You only have 60 lifetime reserve days in your life. You can use a few every time in a hospital, on a few visits or fail to use them entirely.
Are There Other Medicare Options?
For Medicare for dummies, Medicare Part A and B will constitute the Original Medicare. From the 1970s the government allowed seniors to purchase their Medicare plans from private insurance companies. In 1997 the policy was called Medicare + choice and later in 2006, it became Medicare Advantage.
Companies that offer Medicare Advantage packages are required to provide an equivalent of the original Medicare part A and Part B. When you register for the policy; you will pay an additional premium to the one in Part B. Medicare Advantage packages are also more comprehensive as they offer other services. The specific nature of the services depends on the insurance company you choose.
There is also Part D of Medicare which is a prescription drug plan that you need to purchase separately from Part A and B. Medicare advantage packages may sometimes have their prescription medication plan, but that depends entirely on your insurance provider and the package you purchase from them. Medicare Advantage plans are named A, B, C, D, F, G, K, L, M, and N.
How do the Original Medicare and Medicare Advantage Compare?
The initial enrollment period for all Medicare plans is three months on either side of your 65th birthday. Should you miss the joining deadline, you will incur you will be penalized for up to 10% of the premium for each year you failed to enroll. For instance, if you did not register for five years you will pay a 50% penalty on your premium.
First of all, for you to enroll in the Medicare Advantage program, you are required to have Part A and Part B coverage from the original Medicare. You can either obtain the original Medicare separately or task the issuing insurance company with the task of remitting your payments for you.
Medicare Advantage has a ceiling for out of pocket payments. When you reach certain out of pocket amount, the cover pays for all your medical costs for the remainder of that year. Original Medicare does not have a maximum on out of pocket payments. The original Medicare allows you to purchase supplemental insurance or Medigap to cushion you from out of pocket costs. On the other hand, you cannot have both Medicare Advantage and Medigap.
Although Medicare Advantage is standardized and managed by the government, the cost and benefits accrued from each plan vary from one company to the other. You can negotiate for a policy that pays for blood that you receive while in a hospital with Medicare Advantage. With the original Medicare, you pay for the first three pints of blood you receive.
Should You Choose Original Medicare or Medicare Advantage?
This Medicare for dummies piece is meant to point you top the basics of Medicare. Original Medicare is available for everyone but has some restrictions. Medicare Advantage, on the other hand, compliments Medicare but at the same time means extra costs and covers.
While looking for the best cover for you, it is essential to consider the cost. On the other hand, it is also imperative that you consider the benefits of each plan. For instance, if it is crucial that you have a private room during your hospital stay, then original Medicare is not for you.
The bottom line though is that you need insurance. You may need to shop around and ask the questions that are important to you to determine what program will be most beneficial to you.