Millions of Americans rely on Medicare to cover their healthcare needs. Understanding the various parts of Medicare and its supplements can be tough so we talked with a Medicare agent on Health Happens, our weekly Facebook Live show, to clear up how Medicare works. You can watch the full episode by clicking here.
All September we have partnered with Connect for Health Colorado to talk about different insurance topics. Connect for Health Colorado is the official insurance marketplace for Coloradans and the place to apply for tax credits and financial help to reduce insurance costs.
Medicare was created in 1965 to provide health coverage for Americans age 65 and older. The program was expanded in the early 70s to cover younger Americans with permanent disabilities.
There are several different parts to Medicare, somewhat of an alphabet soup, we’ll attempt to break it down:
Original Medicare (Parts A & B)
Medicare Part A covers hospital costs – inpatient care or skilled nursing facility – although not long-term care. Part A also helps pay for hospice care. Medicare Part A has a deductible and coinsurance. Patients pay a portion of the bill, 20% and Medicare covers 80% but there is no limit on patient out-of-pocket costs
Part B covers doctor visits and other medically necessary services and supplies. That includes preventive services, ambulance, medical equipment and a few types of outpatient prescription drugs. Medicare Part B requires a monthly premium.
If you’re over 65 (or turning 65 in the next 3 months) and not already getting benefits from Social Security, you need to sign up to get Medicare Part A and Part B. You won’t get Medicare automatically.
If you don’t sign up for Medicare Part B at 65 and later decide you need it, you’ll likely pay a penalty of 10% of the premium for each 12-month period that you delayed. you can avoid it if you had health insurance through your job or your spouse’s job when you first became eligible. You must sign up within eight months of when that coverage ends
If you already get benefits from Social Security, you’ll get Medicare Part A and Part B automatically when you’re first eligible and don’t need to sign up.
What isn’t covered by Original Medicare?
The biggest potential expense that’s not covered by Original Medicare is long-term care, also known as custodial care.
Other common expenses that Original Medicare doesn’t cover include:
Hearing aids and exams for fitting them
Eye exams and eyeglasses
Most dental care
Medical care overseas
Part D Prescription Drug Coverage
Medicare Part D covers prescription drug costs. Plans are offered by private insurers and require a monthly premium
Medicare Advantage (Part C)
Medicare Advantage, also known as Medicare Part C, is a type of health plan offered by private insurance companies that provides the benefits of Parts A and Part B and often Part D (prescription drug coverage) as well. These bundled plans may have additional coverage, such as vision, hearing and dental care. Unlike Original Medicare, Medicare Advantage plans have an annual limit on out-of-pocket costs. Medicare Advantage plans are typically HMOs or PPOs and are available only in certain areas
Medicare Supplement Insurance (Medigap)
A Medicare Supplement Insurance (Medigap) policy helps pay some of the health care costs that Original Medicare doesn’t cover, like copayments, coinsurance, and deductibles.
Medigap policies are sold by private companies. Some Medigap policies also cover services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. Typically Medigap policies still don’t cover long-term care, vision, dental care, hearing aids, eyeglasses, or private-duty nursing. If you have Original Medicare and you buy a Medigap policy, Medicare will pay its share of the Medicare-approved amount for covered health care costs, then, your Medigap policy pays its share.
For more details on Medicare, Medicare.gov is a great resource. You can also contact the independent Medicare agent we talked to for our Facebook Live segment: Leveto Squalls, 303-881-9290 or [email protected]. Using a broker to help you choose your Medicare coverage doesn’t cost you anything.
9Health is a 501c-3 community non-profit empowering people to put health in their own hands by providing tools such as preventive health screenings, evidence-based, objective health education and eTools and resources for every day in your health journey. To support their work, go to www.9healthfair.org/sponsors/support/