What Is Medicare?

Medicare is a federal health insurance program for people who are age 65 or older, or Medicare eligible (two years after the effective date of being deemed disabled by Social Security), or those diagnosed with End-Stage Renal Disease. The different parts of Medicare are as follows:

Medicare Part A (also known as hospital insurance): Covers inpatient hospital stays, meals, general nursing, hospice care, care in a skilled nursing facility, and some home health care. You don’t pay a premium for Part A, as long as you or your spouse paid Medicare taxes while working. Part A does have a deductible and copays.

Medicare Part B (also known as medical insurance): Covers services from doctors and other providers, outpatient care, home health services and durable medical equipment. Part B also covers many preventive services. You will pay a monthly premium for Part B.  Most people will pay the standard amount, which for 2013 is $104.90.  There is an annual deductible which is sometimes paid by the supplemental coverage you enroll in. After the annual deductible, Medicare pays 80% of Medicare-approved charges for eligible services  and you (or your supplemental coverage if you have it) pay the remaining 20%.

Medicare Part C (also known as Medicare Advantage): Medicare Advantage Plans include all benefits and services covered under Part A and Part B. These plans are run by private insurances companies, approved by Medicare. Medicare Advantage plans must follow Medicare rules, and in many cases, offer extras not provided by original Medicare, such as vision, hearing, dental, and health and wellness programs. You may pay a premium for this plan, in addition to the Part B premium. Each Medicare Advantage Plan may have different out-of-pocket costs and may have varying rules for how to get services, like whether or not a referral is needed (HMO), in-network verses out-of-network, etc.

Medicare Part D (Medicare Prescription Drug Coverage): Helps cover the costs of prescription drugs. These plans are run by private insurance companies, approved by Medicare. Anyone who is entitled to Part A or enrolled in Part B is eligible to enroll in a Part D plan. If you join a plan, you will likely pay a monthly premium, plus a share of the cost of your prescriptions. Each insurance company has what they call a formulary, which is a list of medications they cover, and to what extent. Drug coverage costs vary by plan. Charter Benefits Consulting will review your medications to help you choose the right Part D plan for you.