Medicare is one of the federal government’s largest programs and it provides health care benefits primarily to elderly people and the disabled.
The usual age of eligibility for those benefits is 65, although certain people qualify for the program earlier. (Medicare is available to people under age 65 who have been eligible for Social Security disability benefits for at least 24 months or who have end-stage renal disease.)
Outlays for Medicare are projected to increase rapidly in coming decades because of the retirement of the baby-boomer generation and because growth in per capita spending for health care is expected to continue to exceed growth in per capita gross domestic product over the long term.
Moreover, increases in life expectancy mean that the average length of time that people are covered by Medicare has risen significantly since the program began in 1965. That trend, which increases the program’s costs, will almost certainly continue.
A Medicare Advantage is another way to get your Medicare Part A and Part B coverage. Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are offered by Medicare-approved private companies that must follow rules set by Medicare. If you join a Medicare Advantage Plan, you'll still have Medicare but you'll get most of your Part A and Part B coverage from your Medicare Advantage Plan, not Original Medicare.
Most Medicare Advantage Plans offer coverage for things Original Medicare doesn’t cover, like fitness programs (like gym memberships or discounts) and some vision, hearing, and dental services. Plans can also choose to cover even more benefits. For example, some plans may offer coverage for services like transportation to doctor visits, over-the-counter drugs, and services that promote your health and wellness. Plans can also tailor their benefit packages to offer these benefits to certain chronically-ill enrollees. These packages will provide benefits customized to treat specific conditions. Check with the plan before you enroll to see what benefits it offers, if you might qualify, and if there are any limitations.
Part A: Hospital
Also known as hospital insurance, Part A covers hospice care, home health care, skilled nursing facilities, and inpatient hospital stays including rehabilitation hospital and psychiatric hospital care.
Part B: Medical
Also known as medical insurance, Part B covers physician care, outpatient hospital care and surgery, home health care, durable medical equipment and supplies, and ambulance services. Part B also covers some preventative services to help maintain your health.
Part B coverage is optional, though you may be charged a late enrollment penalty if you are without other creditable coverage and later want to enroll in Part B.
Many private insurance companies contract with Medicare to offer Part C plans, also known as Medicare Advantage plans, which provide all of your Medicare Part A and B benefits. Medicare Advantage plans are required to provide coverage that meets or exceeds the standards set by Original Medicare , and often include additional benefits.
Medicare Advantage plans have different structures; they may be Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO), or Private Fee-for-Service plans (PFFS). With a Medicare Advantage plan you can only go to doctors who accept the plan you are enrolled in.
If currently enrolled in a Medicare Advantage plan, the plan administers all of your Medicare benefits for covered services Original Medicare will not reimburse you directly for any healthcare services you receive. You will need to continue paying your monthly Medicare Part B premium, however.
Also known as Prescription Drug plans, Part D coverage is available through private insurance companies approved by Medicare. You can enroll in Part D coverage as either a stand-alone plan, in conjunction with a Medicare Supplement (Medigap) or Cost plan, or by choosing a Medicare Advantage (Part C) plan that includes prescription coverage.
Part D coverage is optional, but you may be charged a late enrollment penalty if you are without creditable prescription drug coverage and later want to enroll in a Part D plan.
The initial Medicare program created in 1965 only offered Part A and B coverage; Part C and D became available much later, in 1997 and 2006 respectively. As such, you will often hear Parts A and B referred to as Original Medicare.
Medigap plans are supplemental insurance plans sold by private insurance companies to fill the "gaps" of Original Medicare. You must have both Medicare Parts A and B to enroll in a Medigap plan and you cannot have coverage through a Medicare Advantage plan.
There are 11 standardized Medigap plans you can choose from with varying levels of coverage (A, B, C, D, F, high deductible F, G, K, L, M, and N).
Medigap plans allow you to go to any doctor that accepts Medicare and is accepting new patients. The plan will only pay for services after original Medicare pays its share.
E.g. For a doctor visit, original Medicare would pay first, the Medigap policy would pay their portion, and then the beneficiary would be responsible for any remaining balance.
Medicaid provides health coverage to more than 4.6 million low-income seniors, Medicaid also provides coverage to 3.7 million people with disabilities. In total, 8.3 million people are "dually eligible" and enrolled in both Medicaid and Medicare.
Medicaid also covers additional services beyond those provided under Medicare, including nursing facility care beyond the 100-day limit or skilled nursing facility care that Medicare covers, prescription drugs, eyeglasses, and hearing aids. Services covered by both programs are first paid by Medicare with Medicaid filling in the difference up to the state's payment limit.
Extra Help with Medicare
If you meet certain income and resource limits, you may qualify for Extra Help from Medicare to pay the costs of Medicare prescription drug coverage.
In 2016, costs are no more than $2.95 for each generic/$7.40 for each brand-name covered drug.
Other people pay only a portion of their Medicare drug plan premiums and deductibles based on their income level.
For the year 2017 If your income is below $18,090 per year for a single person (or $24,360 for a married couple living together), AND if your assets are below $13,820 for a single person (or $27,600 if you are married).
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