The Basics of Medicare
Before taking the big step in enrolling in Medicare, a little education can go a long way.
An education in Medicare can be a daunting task. Like learning a new language, there are the words, their meanings and structure that need to make sense to become knowledgeable and fluent in the language. In the language of Medicare, we’re here to make that as easy as possible.
For a better understanding of how Medicare works, we can help break this information down. Starting from the basics of the various plans and their unique parts, formularies and cost-sharing ideas, tier ranges and coverage, you will become fluent in the ways Medicare works for you.
Medicare Program – General Information
Medicare is a health insurance program for:
- people age 65 or older,
- people under age 65 with certain disabilities, and
- people of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant).
Part A Hospital Insurance – Most people don’t pay a premium for Part A because they or a spouse already paid for it through their payroll taxes while working. Medicare Part A (Hospital Insurance) helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care). It also helps cover hospice care and some home health care. Beneficiaries must meet certain conditions to get these benefits.
Part B Medical Insurance – Most people pay a monthly premium for Part B. Medicare Part B (Medical Insurance) helps cover doctors’ services and outpatient care. It also covers some other medical services that Part A doesn’t cover, such as some of the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary.
Prescription Drug Coverage – Most people will pay a monthly premium for this coverage. Starting January 1, 2006, new Medicare prescription drug coverage will be available to everyone with Medicare. Everyone with Medicare can get this coverage that may help lower prescription drug costs and help protect against higher costs in the future. Medicare Prescription Drug Coverage is insurance. Private companies provide the coverage. Beneficiaries choose the drug plan and pay a monthly premium. Like other insurance, if a beneficiary decides not to enroll in a drug plan when they are first eligible, they may pay a penalty if they choose to join later.
Medicare Part A
Medicare Part A (Hospital Insurance) helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care). It also helps cover hospice care and some home health care. Certain conditions must be met to get these benefits.
Cost: Most people don’t have to pay a monthly payment, called a premium, for Part A. This is because they or a spouse paid Medicare taxes while working. If a beneficiary doesn’t get premium-free Part A, they may be able to buy it if they (or their spouse) aren’t entitled to Social Security, because they didn’t work or didn’t pay enough Medicare taxes while
working, are age 65 or older, or are disabled but no longer get free Part A because they returned to work.
If they have limited income and resources, their state may help them pay for Part A (see page 60). For more information, they can visit www.socialsecurity.gov on the web or call the Social Security Administration at 1-800-772-1213. TTY users should call 1-800-325-0778.
Medicare Part B
Medicare Part B (Medical Insurance) helps cover doctors’ services and outpatient care. It also covers some other medical services that Part A doesn’t cover, such as some of the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary.
Cost: The Medicare Part B premium each month ($99.90 per month in 2012). In some cases, this amount may be higher if the beneficiary didn’t sign up for Part B when they first became eligible.
Caution: If the beneficiary didn’t take Part B when they were first eligible, the cost of Part B will go up 10% for each full 12-month period that they could have had Part B but didn’t sign up for it, except in special cases. They will have to pay this penalty as long as they have Part B.
They also pay a Part B deductible each year before Medicare starts to pay its share. The Part B deductible for 2012 is $140.00. The beneficiary may be able to get help from their state to pay this premium and deductible.
Medicare deductible and premium rates may change every year in January.
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