Medicare is the health insurance program administrated by the United States government. With the primary goal of providing health insurance to the senior segment of the population, this health insurance is specially designed to cover individuals over the age of 65. Other eligible persons include those that are permanently disabled or suffering from End Stage Renal Disease or Amyotrophic Lateral Sclerosis (ALS).
Medicare Insurance Benefits
Medicare insurance is provided to all eligible recipients and the benefits of having Medicare is clear – it provides health insurance coverage to a segment of the population that otherwise might have difficulty acquiring it elsewhere.
Medicare has four different parts that each have their own purpose, three of which require additional premium payments to obtain. Medicare Part A is the basic part of Medicare that is available to all eligible persons at no additional cost. This is the coverage that you have been paying for via payroll deductions while employed. Depending on your needs and eligibility you can choose to pay for extra Medicare insurance benefits through Medicare Part B, Medicare Part C or Medicare Part D.
Part A - Hospital insurance:
Part A is the original Medicare. When you enter into Medicare insurance you automatically receive the services of part A and there is no monthly cost for this service. Covered benefits include inpatient hospital stays, skilled nursing, home health, and hospice services. Skilled nursing is covered only after a minimum 3 day hospital stay and limited to 100 days per benefit period. Hospital benefits include a semi-private room, meals, general nursing and in-patient prescription drugs.
Home health services are only covered if deemed medically necessary and care must be arranged by a doctor and provided by a Medicare certified home health care agency. Hospice care is provided for the terminally ill with a life expectancy of six months or less.
Medicare Part B - Medical Insurance:
This portion of Medicare insurance is optional and requires a monthly premium payment of $96.40 in 2009. The monthly premium will be higher is you had an adjusted gross income in excess of $85,000 in 2007 ($170,000 if married and filing a joint return). There is an annual deductible of $135 that must be met and applies to all covered benefits under Part B.
If you do not accept and enroll in Medicare Part B at the time you become eligible for Part A, there will be a penalty equal to 10% per 12 months of late enrollment. This penalty may be waived if you declined Part B because you are still covered under an employer sponsored group plan, either as an employee or a dependent on a spouse’s group plan.
If you have elected a late enrollment, you may purchase Part B during the general enrollment period of January 1 to March 31 of each year and coverage will become effective on July 1st of that year.
Some of the covered benefits under part B are:
- Ambulance services
- Out-patient surgery
- The first 3 pints of blood per calendar year
- Preventive health care screenings
- Influenza and pneumonia vaccinations
- Diabetes supplies
- Physician visits
- Durable medical equipment
- Diagnostic tests
- Urgent care
Medicare Part C - Medicare Advantage plans:
Medicare Part C allows insurance companies to offer a PPO or an HMO plan to persons that are covered under Medicare Part A and Part B. These plans, although offered through a private health insurance company, are regulated by the federal government, placing specific covered benefit requirements and premium caps. An additional monthly premium, above what you are paying for Medicare Part B, may be required to enroll in a Medicare Advantage plan.
If you purchase a Medicare Part C plan, your health care expenses become the liability of the insurance company, who must assume the liability of the federal government in both Medicare Part A and Part B covered benefits. Medicare Advantage plans, in an attempt to attract members, will typically offer additional benefits, including prescription drug coverage and reduced deductibles and co-payments.
Medicare Advantage plans, often organized as an HMO plan, contract with a group of physicians, specialists and hospitals and your health care is limited to health care professionals in your selected medical group. This could be a disadvantage if the doctor or hospital you prefer is not within the network.
Medicare Part D - Prescription Drug Plans:
Neither Medicare Part A of Part B provide coverage for prescription drugs. If you have not enrolled in a Medicare Advantage plan to provide drug benefits, you may want to consider purchasing Medicare Part D coverage through a private health insurance company. If you do not enroll in Part D within 3 months of becoming eligible for Medicare, you will only be able to enroll during the last six weeks of each calendar year, from November 15 thru December 31st.
Any insurance company offering Medicare Prescription Drug coverage must meet federal requirements imposed to protect the consumer against premium caps and affords for minimum coverage and benefit requirements, as well as a specific minimum formulary for both generic and brand name drugs.
The annual deductible maximum allowed by insurance companies is $295 in 2009, with the first $2,700 in prescription drug costs annually available for the set co-payment amount. If your prescription drug costs exceed the $2,700, you may be fully responsible for the costs of medications until the total annual prescription expense reaches $4,350, after which time you will receive 100% coverage for the remainder of the calendar year. This drug cost between $2,700 and $4,350, for which the patient is fully responsible, is commonly referred to as the “donut hole” in Medicare Part D.
For further information on Medicare Insurance do not hesitate to contact 1(800) 633-4227 (MEDICARE) or go to http://www.medicare.gov