Medicare Benefit Basics
Aug 16, 2010 / By: Pablo Palomino, Estate Planning Attorney / Category: MedicareMedicare is a Federal health insurance program that falls under the Social Security Program. Medicare provides benefits for people age 65 and older, as well as individuals under age 65 with certain disabilities or with kidney failure requiring dialysis or a transplant. The benefits of the Medicare program consist of several parts that can make the program complex and difficult to understand.
Medicare Part A - Hospital Insurance
Most people don’t pay a premium for Part A because they, or a spouse, already paid for this benefit through payroll taxes while working. Part A is hospital insurance that covers inpatient care in skilled nursing facilities (nursing homes) and hospitals. Hospice and home health care are also covered by Part A.
Medicare Part B – Medical Insurance
Most people will need to pay a premium to be covered under Medicare Part B. It is medical insurance to pay for medically necessary services and supplies provided by Medicare and covers outpatient care, doctor’s services, physical therapists and additional home health care.
Medicare Part C – Medicare Advantage Plan
Medicare Part C combines Part A and Part B and is provided by private insurance companies rather than the Federal Government. It often offers lower costs and additional benefits that Part A and Part B offer separately.
Medicare Part D – Prescription Drug Coverage
Medicare Part D was signed into law in 2006 and is an optional insurance program that charges a monthly fee in exchange for prescription drug coverage.
Supplemental Coverage
Medigap is the termed often used to describe expenses that are not covered by Medicare. Many private companies offer supplemental insurance programs to cover these expenses. Participants in Medicare Part C normally do not require supplemental coverage, as Part C allows users to select medical coverage that addresses most needs.
Learning the basics of the Medicare program is just one part of building a comprehensive retirement plan, as this program may be more costly and provide less coverage than one anticipates. It’s best to know this before retiring, so your plan can include provisions for payments and any additional coverage that may be needed during retirement, particularly when it comes to long term care.
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