When you first start to learn about Medicare, there is no doubt that it can be a little overwhelming. Nobody likes to think of needing extensive medical treatment but it is a reality that we should all prepare for. Like all good preparation, a little knowledge can help ease any anxieties and ensure we get the most from such services.
What is Medicare?
Firstly, do not confuse Medicare with Medicaid. Medicaid is healthcare and sometimes financial assistance for those on low incomes. Medicare, on the other hand, is a national health insurance program for those of 65 years of age and older or those with certain disabilities.
Medicare is divided into four parts A, B, C and D which can cause confusion for some when they are first joining Medicare. It's not always easy to distinguish between those all those Parts and the plans. In this article, we are going to look at Parts A and B of Medicare to get a clearer understanding.
Medicare Part A
Medicare Part A is your hospital insurance. It is designed to cover the common hospital expenses such as hospital stays, nursing care, hospice care and some home health care services.
Most people over 65 will not pay a premium for Medicare Part A, as they paid taxes toward Medicare while working. When you have medical services that fall under Part A, you will pay certain expenses such as deductibles, co-insurance and co-payments.
Medicare Part B
Medicare Part B is your outpatient medical insurance. It is designed to cover those needs which are medically necessary but may not always involve the hospital. For instance, visits to the doctor, preventative services (such as flu shots, bones mass measurements, and cancer screenings), chemotherapy and radiation treatment, lab tests, diagnostic services (including X-rays), medical equipment, mental health services and ambulance journeys.
Potentially some of these services may take place in a hospital but they fall under Medicare Part B because they are provided by a physician. Unless you are getting government assistance, you will pay a monthly premium for your insurance under Part B. Also, just as with Part A, you will be responsible for paying a Part B deductible and 20% of the Medicare approved services.
You can, however, enroll in supplemental insurance to help you pay for that 20% and other cost-sharing items. More on that below.
Medicare Part A or B?
The short answer to deciding whether you need Part A or B is that you need both. When you retire it is likely that Medicare will become your primary health insurance. Clearly, Part A is necessary for any stay in the hospital. Part B covers 80% of the visits to the doctor's office, diagnostic services and treatments noted above as well as many others. Part B is undoubtedly a critical component of your overall health package if Medicare is your primary insurance.
Most people also purchase supplemental insurance to help pay for those deductible and copays we mentioned above. This will give you peace of mind so that you aren't worried about what bills you will have to pay if you need a surgery or an expensive diagnostic test. Many very reputable insurance companies, such as Aetna Medicare, offer supplemental plans in many states. Work with a broker that can quote you various insurance companies in your area.
A Word About Medicare Part D
You will also likely need drug coverage. While Part B will pay for some medications administered in a doctor office setting, it does not cover outpatient drugs.
In 2006, Congress introduced Medicare Part D, which is a prescription drug program for people on Medicare. You can enroll in a Medicare Part D plan, and it will give you access to medications at reasonable copays. Part D is voluntary, but there are late penalties if you do not enroll when you are first eligible unless you have other drug coverage, like VA benefits.
Summary
Now you have a general overview and understanding of the difference between Medicare Part A and B. You are also aware of the need to ensure you have an appropriate plan that covers both parts, so why not contact a licensed insurance agent and find the Medicare Plan that works best for you?