What is the Difference Between Medicare Part A and Medicare Part B?
Trying to navigate the world of health insurance coverage can be a daunting task, especially when government requirements are involved. Medicare is one of many federally funded insurance options to consider when in the market for health insurance. This article will cover the differences between Medicare Part A and Medicare Part B insurance plans.
History
The Medicare program was first proposed by President Harry Truman as a national health insurance plan in 1945. The political stance at that time prevented any further development on the proposal, due to its "socialist" undertones. It wasn't until 1965 that Medicare and Medicaid were signed into law by President Lyndon Johnson as part of his "Great Society" concept, which aimed to place more emphasis on public health and civil rights issues.
Identification
Both Medicare Part A and Part B are federally funded health insurance plans that carry different coverages. To be eligible, Medicare participants must be 65 years old or older, and have paid into Social Security through employment within the workforce (you, or your spouse), or paid into a Railroad Retirement Fund. Disabled individuals under the age of 22 years who are receiving Social Security benefits as a result of a retired, disabled or deceased parent are also eligible to apply. Individuals who have End-Stage Renal Disease, and require a kidney transplant or dialysis are eligible as well, regardless of age.
Features
As soon as you start receiving Social Security benefits, your enrollment in the Part A program is automatic. There are no monthly or quarterly premiums to pay, though a $1,024 deductible per illness is applied, as well as co-payment amounts depending on the length of a hospital stay. Your deductible covers the first 60 days in the hospital, then a co-payment of $256 a day is required for days 61 through 90.
Coverage under Part A applies towards inpatient hospitalization costs. This includes:
- blood transfusions (except first 3 pints)
- home health care services--skilled care, which includes catheter changes, and wound care, individual
must be homebound
Home health care agencies may have differing criteria as to what is covered by Medicare. For example, "homebound" to one agency may mean unable to drive, or seldom leaves the home except for doctor's appointments. Another agency may define "homebound" with less restrictions. If the agency you go through doesn't consider a situation as homebound, Medicare won't cover it. Always verify coverage definitions when considering a home health care agency.
Function
Medicare Part B is optional, and covers additional benefits on top of Part A. Monthly premiums as of 2008 vary according to income level and can be deducted from your Social Security check. Premiums range anywhere from $96.40 for those who make less than $82,000 a year to $238.40 a month for those who make more than $205,000 year. There's also a yearly deductible of $135. Services covered include outpatient therapy, and some expenses for medical supplies, tests and equipment. Part B pays 80 percent of the cost of an item, or service. The remaining 20 percent is your co-pay amount.
Considerations
Something to keep in mind when figuring co-pays--especially for Part B--is what is actually considered "coverable" under Medicare criteria. For example, say you go to the doctor and he charges $100 for a service that's covered under Medicare Part B. Per the guideline, 80 percent, or $80 of the service should be covered, while you pay the remaining $20. However, Medicare pays based on what's considered a "reasonable charge" for that particular service. So, if the claim is only approved for $60, as the "reasonable charge" for the service, you're responsible for an additional $20.
One way to avoid this situation is to make sure your doctor works on an "assignment" basis. This means the doctor is required to accept the Medicare approved amount as full payment once your 20 percent co-pay is paid. "Reasonable charge" decisions made by Medicare will not determine your co-pay amount in this case.
In many instances, Medicare insurance does not cover all expenses; even if you have Part A and B coverages. Additional government run programs like Medigap are available to pick up those additional expenses and medication costs as well.
Time Frame
Because Part B coverage is not automatic, there are specific enrollment periods in which to apply. There's a seven-month window that runs three months prior to the month of your 65th birthday to three months after (within the same year). For those on disability, the enrollment period begins 21 months after you receive your first disability check. General enrollment periods run annually from Jan. 1 to March 31.
Tags: Medicare Part, health insurance, Social Security, health care, Medicare Part Medicare
