Medicare, Medicare Advantage and Supplement Programs
Medicare is very complicated and everyone's situation is unique. I highly recommending having an insurance agent review your situation before signing up or making any changes.
What is Medicare?
Medicare is social insurance program that was formed in 1966. It is administered by the Federal Government and is available to people that are age 65 or older or who have certain disabilities, end stage renal disease, and amyotrophic lateral sclerosis which are under the age of 65.
Medicare is a great benefit for Americans to take advantage of. In 2010, Medicare provided health insurance to 48 million Americans and it was the primary payer for an estimated 15.3 million inpatient stays. On average, Medicare covers about half (48 percent) of the health care charges for those enrolled in Medicare. The remaining charges must be covered by the enrollees with either a supplemental insurance or another form of out of pocket coverage.
How does Medicare work?
Medicare is very complex and consists of 4 parts but here is a simplified version:
- Medicare Part A is your hospital coverage. It covers your "stay" at the hospital. Normally has a deductible and has no premium if you have 40 credits for Social Security.
- Medicare Part B is your physicians or doctors. This also has a deductible and a monthly premium. Plus it has a co-insurance of 80/20.
- Medicare Part C is Medicare Advantage Programs also known as Health Plans. This essentially takes Part A, Part B, and Part D and wraps it into one plan. Seperate insurance companies handle this and therefore they are in charge of the plan. They get paid from your part B premium and the premium you pay for this plan. This type of plan transfers the risk from the government to the insurance company.
- Medicare Part D is your prescription drug coverage. These are insurance plans sold by insurance companies with a monthly premium. They allow for co-pays depending on the price of the drugs.