What is Medicare?

The simplest answer to “What is Medicare” is that it is a federal health insurance program for those 65 and older, certain younger people with disabilities and people with End-Stage Renal Disease. But that doesn’t tell you the whole story of all of the components of Medicare. It now consists of several parts. These “parts” are Medicare Parts A, B, C and D. I will cover all of these parts below.

Medicare Part A – This is your hospitalization insurance which you’ve paid for throughout your working years as part of your FICA taxes. It covers inpatient hospital stays, care in a skilled nursing facility, hospice care and some home health care.

Medicare Part B – Medicare Part B is your medical insurance and covers certain doctors services, outpatient care, medical supplies and preventive services. There is a charge for Medicare Part B. Most people will pay $144.60 in 2020 for Medicare Part B. Those above a certain income level will pay extra for Medicare Part B. This is referred to as IRMAA (Income-Related Monthly Adjustment Amount). The amount will vary depending on your income level. This adjustment also applies to anyone with Medicare Part D or a Medicare Advantage plan that includes prescription drug coverage.

Medicare Part C – Medicare Part C refers to the Medicare Advantage program. These are insurance plans offered by private insurance companies. These plans combine your Medicare Parts A & B and sometimes Medicare Part D into one plan. Some Medicare Advantage plans may offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs. These plans are typically network based plans (HMO or PPO).

Medicare Part D – This is the Medicare Prescription Drug program. Like Medicare Advantage plans, these plans are administered by private insurance companies. Medicare Part D is designed to help with your out of pocket costs for medications. It is VERY important that you review these plans as they change from year to year and a person’s medications are what determine which plan is right for them.

Obviously the above is only a basic breakdown of Medicare. Feel free to reach out if you want more specific information.