Medicare, the federal health insurance program that covers elderly and disabled Americans, has played a central role in the U.S. health system since it was established in 1965. Medicare is run by the Centers for Medicare & Medicaid Services. The Social Security Administration helps CMS by enrolling people in Medicare and by collecting Medicare premiums.
Medicare is available for persons 65 years of age and older (if they or their spouse made payroll tax contributions for 10 or more years) , certain younger disabled people and people with permanent kidney failure. People under the age of 65 qualify for Medicare after 24 months of receiving social security disability payments, or if they have end-stage renal disease or amyotrophic lateral sclerosis (Lou Gehrig’s disease).
Medicare is divided into two parts: Hospital Insurance (Part A) and Medical Insurance (Part B). Part A helps pay for care in a hospital, skilled nursing facility, some home health care, and hospice care. Part B helps pay for doctor bills, outpatient hospital care and other medical services not covered by Part A. Your Medicare card shows the Medicare coverage you have; Hospital Insurance (Part A), Medical Insurance (Part B), or both, and the date your coverage started.
Medicare Part D
Medicare Parts A and B do not include prescription drug coverage. On January 1, 2006, Medicare began coverage of an outpatient prescription drug benefit to all Medicare beneficiaries. The new benefit, called Part D of the Medicare Program, is designed to lower the cost of prescription drugs for most senior and disabled Medicare beneficiaries.
People on Medicare, Part A or B, who would like to receive prescription drug coverage under Part D have to enroll in a private insurance policy that offers Part D coverage and is approved by Medicare. These plans are called Medicare Prescription Drug Plans (PDPs). You can sign up for the drug benefit from time to time based on needs and Medicare coverage.
Signing up for Basic Medicare Part D
Medicare Part D offers prescription drug coverage. If you already have an insurance policy that covers prescription drugs when you sign up, you will have to choose between your current policy or a new policy and basic Medicare Part D. You will receive notification of whether or not your existing coverage is “creditable” (equal to or better than Medicare Part D).
Signing up for Medicare Prescription Drug Plans (PDP)
Medicare Prescription Drug Plans (PDPs) offer prescription drug benefits. Drug plans vary in what prescription drugs are covered, how much you have to pay and which pharmacies you can use. Like any other insurance, if you join you pay a monthly premium and pay a share of the cost of your prescriptions.
Advantages of a PDP vs. Basic Medicare Part D
PDP plans offer possible advantages in cost value, types of drugs and combinations of services, such as preventive care. Premiums might be equal to or more than those of the basic Medicare Part D Program. In any case, they must at least offer the same basic coverage as Medicare Part D.
Medicare is the basic health insurance plan Americans over 65 (and some younger for disability Medicare) rely on for the bulk of their health care needs. However, this care is limited, and Medicare supplemental insurance also known as Medigap is a means of extending coverage and reducing out-of-pocket expenses.
Medicare Supplemental insurance or Medigap comes in 10 standardized Medigap plans. The plans are referred to by letter (Plan A, B, C, D, E, F, G, H, I, J) and vary in both price and coverage. Plan J has the most coverage, and Plan A the least.
Each plan is standardized across the nation. This system makes it very easy to compare policies, because every plan must carry the same coverage, no matter who is selling it. Plan J from one insurer offers identical coverage to Plan J from another insurer, plan A from one is equal to A from another, and so forth. Not every plan is offered in every state.
Coverage includes approved medical expenses for physician services, medical and surgical services and supplies diagnostic tests, and much more. In addition, our C and F plans also cover your Medicare deductibles, co-payments for hospitalization, emergencies while traveling, and skilled nursing care.
Medicare Advantage (formerly known as Medicare + Choice) is a term for managed care plans offered through Medicare, and is an alternative to Original Medicare (Parts A and B) to cover medical expenses. Starting this fall, many Medicare Advantage plans will offer a Prescription Drug benefit as part of the overall plan. Senior Educators can help you Select a Medicare Advantage Plan that fits your needs.
About Medicare Advantage Plans
In Medicare Advantage plans, the government contracts with private insurance companies to add Medicare beneficiaries to the rolls of those covered under the insurance company’s plan. Payments to the plan are from Medicare (diverting the Part B premium payments), and potentially from the enrollee if the plan costs more than the Part B premium. Enrollees in Medicare Advantage plans are still part of Medicare.
County and Regional Medicare Advantage Plans
Not every Medicare Advantage plan is available in every county, and not every plan is right for every person. However, these plans are growing in popularity and availability, making them a very strong option for most people.