Ready for Medicare
Medicare is a Federal Government program set up in 1965 by Congress to provide some basic health insurance coverage to older Americans. Like most government programs it has continued to grow and grow. In 2010, for example, Medicare covered about 50% of all healthcare bills for senior citizens. In conjunction with other insurance products available to senior citizens, Medicare coverage provides most elderly Americans with a safety net to help protect them from the catastrophic costs of major illnesses. It ’s hard to explain Medicare in “Medicare for Dummies” kind of way, but I’ll try.
Medicare consists of 4 parts:
Part A covers inpatient hospital stays including a semi-private room and the usual and customary charges for things like food and standard tests. There is a limit on hospital stay length. The first 60 days are covered at 100%. Then after that (if you’re still alive) there is a co-pay that kicks in and changes with the length of the stay.
Part B covers charges by doctors and for out-patient care and services. Unlike Part A which is generally paid for by the government, Part B is paid for by an insurance premium you have to pay when you turn 65. The government claims that Part B is “optional” but only if you are still working past 65 and are covered by an employer insurance plan. The Part B premium as of 2015 is about $105.00 for most workers and it is directly subtracted from your monthly SS check. In addition to the coverage provided by Parts A & B recipients can buy additional insurance to cover the co-pays and charges not covered by Parts A&B. This is called Medigap insurance.
Part C Part C is a whole different animal. Usually called “Medicare Advantage” this program is actually an alternate insurance program altogether. The “Original Medicare plan” consisting of Parts A and B offers a “fee for service” plan to doctors and hospital. This means that they are paid an agreed upon amount for each medical service provided.
In contrast, Part C or Medicare Advantage offers a menu of several different Plans put together by private insurers which must, by law, include at least the same level of coverage that a recipient would receive under “original Medicare.” The plans offer additional coverage for the things like co-pays and extra hospital charges not covered by “original Medicare” plan. There is usually an additional premium attached to these Medicare Advantage plans. This charge can be as little as nothing to hundreds of dollars a month.
These are standardized into plans labeled A through M. The idea is that if you get Plan A from one insurance company it will be the same coverage as Plan A from another company. The hope is that the Insurance companies, by using their complex systems of healthcare management and by negotiating “lower prices” with hospitals and providers, will be able to provide the recipient with even more care than they would receive from “Original Medicare.”
Part D covers drugs and prescriptions. But not in any easy to understand way. It is generally aimed at helping low-income retirees with the high cost of drugs, but it really helps just about everyone. Additional drug coverage is also partially funded by several States through State-run programs. (check your particular State) These Part D plans are usually administered by private insurance companies are vary greatly in their particular drug coverage as well as the costs.
Boil it down to this. . . . You either have one of two choices:
1) “Original Medicare” with or without a supplemental Medigap policy or
2) Medicare Advantage Policy with a selection of Plans A through M.
How old do I have to be to get Medicare?
Medicare is provided to all Americans over 65 who have worked and paid in Medicare taxes for at least 10 years. This also includes spouses of workers. Certain other people can qualify if they have specific conditions or diseases.
For example; If you are collecting Social Security Disability Insurance and have ALS (Lou Gehrig’s disease) You can qualify for Medicare earlier than 65.
Another example; If you are under 65 and collecting Social Security Disability Insurance you may qualify for Medicare after 24 months.
These are only two examples, there are some others. If you feel you might qualify contact the Medicare Administration office or check out their website.
Who pays for Medicare
How much does Medicare Cost?
Part A of original Medicare is funded by a 2.9% payroll tax on all workers. The rate even goes to 3.8% if you make over about $200,000. (which we know is probably not the case)
Part B and Part D are paid for by a combination of payments by Medicare recipients and the General Fund. These payments are in the form of premiums which are usually deducted from your monthly Social Security check. click here to see current costs
How do I sign up for Medicare?
If you’re asking “how do I get Medicare?” well, signing up for Medicare is easy. You just go to the Medicare website and sign up. The hard part is figuring out which coverage is best for you. Since everyone has different needs based on current and possible future health problems, the selection from the different plans and companies can be confusing.
There! I think that sort of covers the basics. If you have anything to add or see where I need correction. Send me a comment.