Keyword: Medicare insurance plans

Country: United States

Industry: insurance

Understanding Medicare

In a bid to enhance social health and welfare, the federal government established Medicare as a health insurance program to cater for those aged above 65, younger persons with specific severe disabilities and persons suffering kidney failure. However, Medicare is not entirely free and it does not cover all medical, hospital or prescription expenses. In addition, besides the age and disability, there are additional eligibility requirements, such as citizenship or permanent residency, a social security number and contributions. Furthermore, the insurance has since evolved from its initial conceptualization, such that there are now different plans therein.

Original Medicare

Original Medicare is divided into Parts A and B, both of which are directly administered by federal government. Part A insurance covers hospital stay expenses such as meals and supplies. It also caters to home or hospice care services delivered on a part-time basis such as physical and speech therapy. The cost of accessing Part A insurance is free if you have worked and paid social security tax for forty calendar quarters, or ten years. Part B Medicare insurance covers medical expenses such as doctor’s fee, medical equipment including wheelchairs, outpatient and preventive services such as flu shots. However, unlike Part A, persons utilizing this insurance have to pay monthly premiums for this coverage, but enrollment in it is voluntary.

Medicare Advantage Plans

This plan is also known as Plan C and unlike original Medicare is supplemented by private insurance companies. Although you can opt to join this plan rather than the federally administered one, the federal government still requires the insurers to offer the same benefits as are available in Original Medicare only varying the cost and coverage restrictions. The advantage of joining this plan is that you are able to tailor your health insurance coverage to one that answers your specific needs more closely. However, Part C is not a separate plan and you must still be enrolled for Medicare, the difference being that your claims are handled by a private insurance company rather than federal government.

Part D

Although a number of Medicare Advantage Plans offer this insurance plan as an already included component, for those under original Medicare, separate enrolment under Part D if needed, is required. Federal government does not administer outpatient prescription drug insurance plans. Part D is the plan that allows you to access these drugs and it is run entirely by the private insurance companies. Eligibility and access depends on whether you have paid the premiums and the value of drugs you wish to obtain. Medicare Part D pays for 75% of the drug costs if you spend between 250 and 2250 dollars annually, nothing for the next 2850 dollars spent and 95% of costs above 3600 dollars.

Conclusion

It is important to understand these distinctions, to know the extent to which you are covered and where possible, how to tailor the insurance to meet your health needs.

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