Understand How Medicare Works
It would've been helpful if we’d had a basic understanding of Medicare from the very beginning. Instead, we learned all about Medicare the hard way, when our dad's coverage reached its limit. And so we thought we'd share with you the essentials of Medicare to help you better navigate the system.
Medicare is a government health-insurance program for people 65 and over, regardless of their income level.
- Medicare Part A provides coverage for hospitalization, skilled-nursing care and in-home care, and hospice care. Most people have this coverage automatically when they turn 65, and there is no monthly premium. There is an exception to this: If your parent or parent's spouse didn't have enough Medicare taxes deducted prior to retirement, then coverage is not automatic and a premium is required.
- Medicare Part B provides coverage for doctor visits, out-patient procedures, some medical equipment and supplies. There is a monthly premium and it is necessary to sign up for this coverage.
- Medicare Part C. also known as the Advantage Plan, is Medicare's version of an HMO or PPO. These plans are administered through private companies, but are Medicare-approved. Hospitals and doctors are selected through the particular plan's network. There is a monthly premium (usually smaller than Part B) and it is necessary to sign up for this coverage.
Part Dprovides prescription drug coverage. There are various private company plans to choose from. Sometimes there is a monthly premium and it is necessary to sign up for this coverage.
- It doesn't cover long-term care (nursing home care). The only possible exception is if your parent is signed-up for Medicare Part C, and the HMO or PPO is in a network with a nursing home. This is worth checking out.
- It doesn't usually cover 100% of medical costs. Therefore, many people purchase gap insurance, which is also referred to as a Medigap policy. It generally works like this: If Medicare pays 80% of a medical bill, then the gap insurance would pay the other 20%. If Medicare covered 20% of the cost, then the gap insurance would pay the other 80%. But if Medicare doesn't pay, then Medigap insurance doesn't pay either. Note: Those with Medicare Part C - the Medicare Advantage Plan, cannot use Medigap insurance.
- It can run out. Our dad depleted both hospitalization and skilled-nursing care coverage (rehab), bringing our family's stress level to new heights.
- The Medicare.gov website let's you know what's covered and what's not covered.
- Medicare also covers some groups of people under 65, if they have a qualifying disability.