Understanding Medicare
How Does Medicare Work?
Medicare is a federal health insurance program primarily for people aged 65 and older, as well as for certain younger individuals with disabilities or specific conditions. Let’s break it down to understand how the different parts of Medicare work, what they cover, and how they differ from supplemental and Advantage plans.
Medicare Part A: Hospital Insurance
Medicare Part A covers inpatient hospital care, skilled nursing facility care, hospice, and some home health care services. Here’s how it works:
Coverage:
Medicare Part B: Medical Insurance
Medicare Part B helps cover outpatient services, such as doctor visits, preventive care, and medical supplies.
Coverage:
Medicare Part A: Hospital Insurance
Medicare Part A covers inpatient hospital care, skilled nursing facility care, hospice, and some home health care services. Here’s how it works:
Coverage:
- Typically covers 80% of hospital costs after you meet the deductible.
- Includes semi-private rooms, meals, and general nursing care during hospital stays.
- Most people don’t pay a premium for Part A if they’ve worked and paid Medicare taxes for at least 10 years.
- There is a deductible for hospital stays, which resets each benefit period.
Medicare Part B: Medical Insurance
Medicare Part B helps cover outpatient services, such as doctor visits, preventive care, and medical supplies.
Coverage:
- Covers 80% of approved doctor services after you meet your annual deductible.
- Includes services like lab tests, physical therapy, and durable medical equipment.
- Monthly premiums are based on your income.
- The government typically deducts the premium directly from your Social Security benefits.
Medicare Advantage (Part C) vs. Medicare Supplements
Medicare Advantage (Part C):
Medicare Advantage plans are an alternative to Original Medicare (Parts A and B). These plans are offered by private insurance companies and often include additional benefits like dental, vision, and hearing coverage.
Key Features:
- Combines Parts A, B, and sometimes Part D (prescription drug coverage).
- Includes an out-of-pocket maximum to limit expenses.
- Operates through provider networks (HMO or PPO).
- May have low or $0 premiums but often involve co-pays and coinsurance.
Learn more about Medicare Advantage Plans.
Medicare Supplements (Medigap):
Medigap plans are designed to fill the “gaps” in Original Medicare by covering costs like deductibles, co-pays, and coinsurance.
Key Features:
- Works alongside Original Medicare (Parts A and B).
- Provides predictable costs by covering the remaining 20% not paid by Medicare.
- Does not include prescription drug coverage.
- Monthly premiums vary by plan and provider.
Medicare Part D: Prescription Drug Plans
Medicare Part D provides prescription drug coverage through private insurance companies. These plans are designed to help reduce the cost of medications.
Key Features:
- Works with Original Medicare or a Medicare Advantage plan.
- Covers both generic and brand-name drugs.
- Monthly premiums vary by plan.
- Includes a deductible, co-pays, and possibly a coverage gap (the “donut hole”).
Understanding the differences between these options ensures you choose the coverage that best suits your needs. For personalized advice, consult a licensed insurance agent or explore Medicare’s official resources.