Medicare is a
federal health insurance program that pays for a variety of health care
expenses. Here's a rundown of the most important things you need to know about
Medicare.
Unlike most developed
countries in the world, the United States does not have a universal healthcare
system. However, millions of Americans have access to Medicare, a federal
government insurance program that subsidizes certain healthcare services. Let’s
see what it’s about..
Medicare covers those over
age 65, as well as younger people who meet certain eligibility criteria, and
people suffering from certain health problems. Those who do not qualify for
Medicare plans at no cost have to pay a premium and need to sign up during
specific enrollment periods.
Although Medicare helps
with the cost of healthcare services, it does not necessarily cover all medical
expenses or the cost of long-term care.
The
types of Medicare
Medicare is divided into
four categories: Medicare Part A, Part B, Part C or Medicare Advantage, and
Medicare Part D for prescriptions.
Medicare Part A is
basically hospital insurance that pays for inpatient care in a hospital or
other inpatient-like settings. Medicare Part A also covers some home healthcare
and hospice care.
Medicare Part B is
medical insurance that helps cover services performed by doctors and other
healthcare providers, durable medical equipment, and some preventive services.
Social Security enrolls
American citizens and residents in the Medicare Part A and Part B, which are
the Original Medicare.
Medicare Part C, now
known as Medicare Advantage, bundles all the benefits
and services covered under Part A and Part B under a single plan offered by a
private insurance provider. Depending on your insurance company, Medicare Part
C may provide other benefits and features not included in Original Medicare.
Medicare Part D helps
cover the cost of prescription drugs.
Additionally, Americans can
choose to order a Medigap policy from a private insurance company that covers some of
the costs that Medicare does not cover, such as copayments, coinsurance, and
deductibles.
How
Medicare works
Medicare is a federal
health insurance program that pays for a variety of health care expenses.
It’s administered by the Centers for Medicare & Medicaid Services (CMS), a
division of the U.S. Department of Health & Human Services (HHS).
Just like Social Security,
Medicare is an entitlement program, meaning that U.S. citizens and permanent
residents earn the right to sign up for Medicare by working and paying their
taxes for a minimum required period. It’s possible to enroll in Medicare if you
haven’t paid taxes for very long in the United States, but you’ll need to pay
more.
Who’s
elligible for Medicare
Each Medicare plan has
different elligibility criteria.
American citizens or
permanent residents of the United States who are age 65 or older qualify for
Medicare Part A.
According to Social
Security services, you can be ensured for Part A at no cost at age 65 if either
one of the following applies:
·
You receive or are eligible to receive benefits from Social
Security or the Railroad Retirement Board (RRB).
·
Your spouse (living or deceased, including divorced spouses)
receives or is eligible to receive Social Security or RRB benefits.
·
You or your spouse worked long enough in a government job through
which you paid Medicare taxes.
·
You are the dependent parent of a fully insured deceased child.
·
Before the age of 65, people may be eligible for Medicare Part A
at no cost if one of the following applies:
·
You’ve been entitled to Social Security disability benefits for 24
months.
·
You receive a disability pension from the RRB and meet certain
conditions.
·
You receive Social Security disability benefits because you have
Lou Gehrig’s disease (amyotrophic lateral sclerosis).
·
You worked long enough in a government job through which you paid
Medicare taxes, and you have met the requirements of the Social Security
disability program for 24 months.
·
You’re the child or widow(er) age 50 or older, including a
divorced widow(er), of a worker who has worked long enough under Social
Security or in a Medicare-covered government job, and you meet the requirements
of the Social Security disability program.
·
You have permanent kidney failure (end-stage renal disease) and
you receive maintenance dialysis or a kidney transplant.
If these conditions don’t
apply to you, Medicare Part A is available by paying a monthly premium.
If you’re eligible for
Medicare Plan A at no cost, you can enroll in Medicare Part B by paying a
monthly premium.
You can only sign up in
Plan A and Plan B during designated enrollment periods.
If you have Part A and Part
benefits from the government, this means you have Original Medicare. However,
if you receive benefits from a private company approved by Medicare, you have a
Medicare Advantage plan, which provides extra coverage and may lower
out-of-pocket healthcare costs.
If you have Medicare
Advantage, you don’t need a Medigap policy since many of the same benefits are
covered. These include extra days in the hospital after you’ve used the days
that Original Medicare covers.
Anyone with Original
Medicare is also eligible for Part D, which covers prescription drug costs.
Part D is available as a stand-alone policy or built into Medicare Advantage.
To access Part D, you need
to pay an extra monthly premium. Beneficiaries with higher incomes will pay a
higher monthly Part D premium.
People who have a low
income and have Medicare Part A may be able to get help from the state in order
to pay for Medicare premiums. Some of these state-sponsored programs pay for
Medicare premiums while others cover Medicare deductibles and coinsurance. Each
state has different eligibility criteria, so it’s best if you visit Medicare.gov to
find out the required qualifications for your state.
Additionally, as of March
27, 2020, President Trump signed the CARES (Coronavirus Aid, Relief, and
Economic Security) Act, into law. This program expands Medicare’s ability
to cover healthcare costs for those affected by COVID-19.
How
much does Medicare cost in 2020
Depending on your age,
history of chronic disease, and the number of years employed, the cost of
Medicare can vary wildly. Here’s how much various Medicare plans cost in 2020
at a glance.
|
Part
A premium
|
Most
people don’t pay a monthly premium for Part A (sometimes called “premium-free Part A“).
If you buy Part A, you’ll pay up to $458 each month in 2020. If you paid
Medicare taxes for less than 30 quarters, the standard Part A premium is
$458. If you paid Medicare taxes for 30-39 quarters, the standard Part A
premium is $252.
|
|
Part
A hospital inpatient deductible and coinsurance
|
You
pay:$1,408 deductible for each benefit periodDays 1-60: $0 coinsurance
for each benefit periodDays 61-90: $352 coinsurance per day of each
benefit periodDays 91 and beyond: $704 coinsurance per each “lifetime
reserve day” after day 90 for each benefit period (up to 60 days over
your lifetime)Beyond lifetime reserve days: all costs
|
|
Part
B premium
|
The
standard Part B premium amount is $144.60 (or higher depending on your
income).
|
|
Part
B deductible and coinsurance
|
$198.
After your deductible is met, you typically pay 20% of
the Medicare-approved amount for most doctor services (including
most doctor services while you’re a hospital inpatient), outpatient therapy,
and durable medical equipment (dme)
|
|
Part
C premium
|
The
Part C monthly premium varies by plan. Compare costs for specific Part C
plans.
|
|
Part
D premium
|
The
Part D monthly premium varies by plan (higher-income consumers may
pay more). Compare costs for
specific Part D plans.
|
Source: Medicare.gov.
What’s
the difference between Medicare and Medicaid
Many confuse Medicare with
Medicaid, or vice-versa. Medicaid is a joint federal and state program that
provides hospital and medical coverage for those with low income that cannot
afford Medicare Plans A and B.
While Medicare is designed
for those over 65 and younger people with certain health conditions, Medicaid
provides healthcare coverage to people with low income.
Each state in the country
has its own rules about who’s eligible for Medicaid and what costs the
insurance covers. Depending on where you live, some may qualify for both
Medicare and Medicaid.
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