Understanding Types of Medicare Plans

Medicare is a social insurance program that provides health coverage for seniors, people with disabilities, and some younger Americans. Once the full Medicare benefits are provided, beneficiaries pay a percentage of their income based on an income-related sliding scale. The Medicare program has four parts: Part A (Hospital Insurance), Part B (Medical insurance), Part C (Medicare Advantage Plans), and Part D (Prescription Drug Plans).

Part A (Hospital Insurance)

The Part A benefit is the basic medical insurance coverage that most people are eligible for and pays a portion of the cost of inpatient hospitals, skilled nursing facilities, and home health care. Medical expenses are paid by the hospital or other facility, except for hospice care.

To qualify for the Medicare Part A program, a person must be a US citizen. In addition, a legal permanent resident aged 65 years or older usually can qualify, but the person must have maintained that residency for at least five years. Most people become eligible for this plan when they become 65 years old. However, people below the age of 65 may meet eligibility through the following criteria:

• People with disabilities who have received Social Security (SS) benefits for at least 24 months.  

• People with end-stage renal disease, or ESRD.  

• Other people who have disabilities, or in some cases, have been receiving disability payments for 24 months.

 The rules vary slightly for those with ESDRD. For one, they must have been on dialysis for at least three months, and their eligibility begins the third month after dialysis. Second, they must have an ESRD designation from the Social Security Administration. Suppose they do not have a formal ESRD designation but meet all other criteria. In that case, they may still be eligible for Medicare Part A under informal review by their local Social Security office.

 Part B (Medical Insurance)

Most Medicare-approved costs are administered on an outpatient basis, and medical insurance covers 80% of Medicare-approved costs. The implication is that you will receive the benefits of part B coverage as an outpatient. This means that you will not have to stay in a hospital but can instead visit your doctor and receive medical care. Medicare Part B is often called "medical insurance" because it covers services such as doctor's office visits, laboratory tests, and durable medical equipment. Exceptions to this rule include emergency room visits and all services received within the emergency room.  

Medical insurance mostly covers vaccines and early detection screenings. An age limit of 65 years is not mandatory for this part of the Medicare program. As a result, some younger people on Social Security disability can still enroll in this program. This plan can still cover ESRD patients (though they are eligible for coverage in Part A). Medicare part B is special in that its advantages vary from one individual to another. For example, some plans restrict an individual's coverage to an in-network of doctors, referred to as 'concierge-style medical coverage.

Part C (Medicare Advantage Plans)

The Medicare advantage plan differs from the original Medicare in that it is issued by private health insurance companies rather than the national government. For this reason, many people opt for this insurance plan, one of the fastest-growing types of coverage among Medicare beneficiaries.

Part C covers both Part A and Part B's benefits. Inpatient hospital stays are covered when this type of plan is chosen. Part C also covers inpatient rehabilitation, limited home care, and hospice. Part C plans are sometimes more cost-efficient than Part A, and most of the time, they have out-of-pocket costs that are lower than the ones they cost under Part A. Some extra packages that part C covers include dental, vision, hearing, and prescription drugs. 

If you already qualify for Part A and Part B, you can join a Medicare Advantage plan to receive your health insurance coverage. When you join a Medicare Advantage plan, you may give up some extra benefits currently covered by Part A or B. This issue is discussed in detail with your plan's representative. ESRD patients are also eligible to enroll in a Medicare Advantage plan; before legislation allowed them to enroll, it would not have been possible.

Part D (Prescription Drug Plans)

It may be a surprise that the original Medicare coverage (Part A and Part B) does not cover prescription drugs. Prescription drugs are among the most vital and expensive types of coverage an individual may need. 

Prescription drug coverage is provided by the Part D program, funded by the government, and administered by private insurance companies. Although optional, you can get a drug plan that suits your particular needs. The federal government pays for about 75 percent of the benefits covered by Part D. The remainder of the costs is usually covered by your income. Copays and deductibles apply to Part D coverage.

 The monthly premium for Medicare part D depends on your income and select insurance plan. Note that each year, the Medicare Board of Trustees determines how much it will cost to run Medicare in the upcoming year.

 The prescription drugs covered by part D include vitamins, supplements, and weight loss medications. These medications are usually covered at low co-pay and deductible levels. The plan's purpose is to give you access to prescription drugs, which you may need to treat chronic diseases.

Conclusion

Medicare plans help people get medical care and prolong their lives. Monthly premiums are moderate, but the benefits are great. Each plan of Medicare has its ups and downs. The best way to choose the plan that meets your needs is to explore your options and compare plans before choosing one. In case of questions or doubt, ask your doctor, health insurance company, or the Social Security office.