83 percent of Medicare users are 65 or older.
Medicare was created under the Social Security Act of 1965. The program, which offers health insurance coverage to people 65 years of age and older, was originally made up of only two parts, called Part A and Part B. In time, two more sections were added to Medicare: Part C, or Medicare Advantage, and Part D, covering prescription drugs. People who qualify for the program can choose from among the four plans, which all feature their own benefits, deductibles, premiums and copayments.
Part A
Part A, along with Part B, is often called original or traditional Medicare. Part A is mandatory, and you cannot enroll in any other part of Medicare without also enrolling, or already being enrolled, in Part A. Part A is premium-free for senior citizens who have paid Medicare taxes for 40 quarters, or ten years. Part A benefits help cover inpatient hospital care as well as hospice care and home health services. As of 2011, Part A has a deductible of $1,132 for hospital stays up to 60 days and coinsurance payments of $283 per day for stays of 61 through 90 days. You also have to pay $141.50 per day for days 21 through 100 in a skilled nursing facility.
Part B
Part B, unlike Part A, is optional. Part B always requires a monthly premium. In 2011, the premium was $115.40 for new members, $110.50 for existing members and $96.40 for beneficiaries who have their premiums deducted from their Social Security benefits. Part B offers coverage for outpatient hospital services and preventive services such as mammograms, smoking cessation programs and cancer screenings. Many preventive tests are free, but you will have to pay a 20 percent copay for other services. In 2011, the Part B annual deductible was $162.
Part C
Part C Medicare is more often called Medicare Advantage. Medicare Advantage was created in 1997 and allows Medicare beneficiaries to get their Part A and B benefits through a private insurance company. Medicare Advantage offers all the same benefits as Parts A and B, except for hospice care. MA plans generally offer additional benefits such as hearing, vision or prescription drug coverage. MA plans take the the form of standard indemnity plans, HMO plans, PPO plans or special needs plans for people with certain health conditions. There are also MA policies designed to work with health savings accounts. The premiums, deductibles, coinsurance and copayments for Medicare Advantage vary by company.
Part D
Part D offers benefits only for prescription drug coverage. If you already get prescription medication benefits through Medicare Advantage or some other coverage outside of Medicare, you do not need to sign up for Part D. The rules regarding what kinds of drugs Part D will cover and the cost of monthly premiums varies depending on your plan, your income and your insurance company. Part D is optional, but if you do not sign up for it when you are first eligible and you have no other prescription drug coverage, then you will have to pay a late enrollment penalty for enrolling at a later date.
Tags: Medicare Advantage, Part Part, drug coverage, prescription drug, prescription drug coverage
