Navigating the Medicare Maze
Medicare is the federal health insurance program for people who are age 65 or older and those younger than 65 with a disability. The definition of disabilities used to determine Medicare eligibility is the same as that used for Social Security benefits.
Medicare can be a maze all by itself. It has various components, designated by the letters A through D. Each one provides different benefits. In general, out-of-pocket costs are lower in Medicare than in commercial health plans. Here is a summary of what each part covers:
Part A covers inpatient care. It pays not only for hospitalization, but also for short-term nursing home care, hospice services, doctor services and lab tests done while you are in a hospital or other facility, and some home health care. Although you don't have to pay a premium for Part A, you do pay coinsurance and a yearly deductible. When you sign up for Medicare, you are automatically enrolled in Part A.
Part B covers outpatient care and is optional. It covers part of your doctor bills, outpatient treatment, home-based physical therapy, certain screenings and lab tests, and a limited number of prescription drugs. There is a monthly premium for Part B and an annual deductible. Parts A and B are considered "traditional Medicare," or "original Medicare."
Part C offers an alternative to traditional Medicare for people who prefer a managed care plan (for example, an HMO or PPO). These Medicare plans, which are known as Medicare Advantage plans, are offered by Medicare-approved private insurance companies and handled by managed care organizations. They include all the services in Part A and Part B and usually Part D (prescription drug coverage). These plans may also include other benefits, such as vision, hearing, and dental programs, depending on the specific plan. Typically, copays and deductibles are lower than with traditional Medicare, but the premium is higher. Because Medicare Advantage plans usually include prescriptions and sometimes other coverage, they can make paperwork and communication easier. Because they are managed care plans, they are likely to use provider networks. Before signing up for a Medicare Advantage plan, check to see whether your care providers are included in the plan's network.
Part D covers a portion of prescription drug costs. Many options exist for the type of benefits provided by these plans.
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