In 2010, the US had more than 46 million Medicare beneficiaries.
Medicare was first introduced in the United States in 1965 as part of the Social Security Act of that year. Medicare is a national health insurance program used mainly by senior citizens, although younger individuals with disabilities and certain health problems may also qualify. Medicare comes in four parts, and it is not necessary to purchase all four in order to receive benefits. The plans you buy each come with their own coverage, as well as their own array of costs.
Part A
Part A, along with Part B, is often called Original Medicare. Part A offers mainly inpatient hospital benefits, but it also covers home health services and hospice care for terminally ill patients. Part A benefits are free and available to most US citizens, at age 65, who have worked or whose spouse has worked, long enough to qualify. While most people will not pay premiums for Part A, deductibles and copays apply. In order to enroll in any other parts of Medicare, you must be enrolled in Part A.
Part B
While Part B is also considered Original Medicare, it requires a monthly premium payment. Part B covers mainly preventive and outpatient services. Doctor's visits, health screenings, certain vaccinations and wellness programs are also included in Part B. Both Part A and Part B are required if you decide to purchase Medicare Advantage. In addition to the monthly premium, you must meet an annual deductible and a copay, which is 20 percent for most services. While you may not want to pay the monthly premium for Part B, private medical coverage for someone over 65 would be much more expensive, if you could find it at all. If you do not enroll in Part B when you first have the chance and then change your mind, you will be responsible for a late enrollment penalty.
Medicare Advantage
Medicare Part C is more often called Medicare Advantage. MA allows Medicare beneficiaries to purchase their Parts A and B benefits from private insurance companies instead of the federal government. MA plans must feature all the same benefits as Original Medicare, except hospice. They may also offer additional benefits such as hearing, vision, dental or prescription drug coverage. Medicare Advantage plans are offered in various types including HMOs, PPOs, special needs plans and high-deductible plans you can use with a medical savings account. MA plans are sold by service area, so if you move out of state or out of county, you may need to buy another plan than you originally had. The costs for Medicare Advantage are set by the individual insurance companies.
Part D
Part D Medicare is insurance for prescription medications only. If you already have an MA plan with these benefits, you do not need to buy a separate Part D plan. Like Medicare Advantage, Part D is sold by private companies according to service area. Not all Part D plans cover all drugs. Part D also comes with deductibles, copays and the infamous "donut hole," where insurance benefits cease after your drug costs go above an initial coverage limit. Reforms meant to finally close the donut hole began in 2011, but it will still exist until 2020. If you have few, inexpensive or no prescription drug needs, you may not immediately need to buy Part D. You may also have drug coverage under another plan with your former employer or through a Medicare supplement. However, Part D also has a late enrollment penalty if you do not join when you are initially eligible.
Tags: Medicare Advantage, Part also, Part Part, monthly premium, Original Medicare, another plan
