You’ve probably heard of Medicare. After all, it’s a program that covers over 50 million American citizens. Unfortunately, for many of those Americans, specifics can be hard to come by. What’s covered and what isn’t? When do you qualify? Why is your neighbor getting more coverage than you are? It would be helpful to have this national health insurance explained in an easy-to-understand way, wouldn’t it?
This article will give you a broad overview of the basics. It’s just an introduction, so don’t expect everything to be covered, but it’s a perfect read if you don’t know the first thing about America’s public health insurance system.
It’s a System in Four Parts
Medicare isn’t just one system. It’s several different programs under a single umbrella, some of which are optional:
- Part A helps patients by providing inpatient services at all U.S. hospitals. It also covers short stays at nursing facilities, provided the patient stayed at a hospital beforehand, and also covers care at a hospice.
- Part B covers most ordinary services like doctor’s visits and elective surgeries. This is called outpatient medicine. It also covers drugs that require a doctor’s supervision to administer, like certain types of intravenous (IV) medication.
- Part C is the most recent offering. These are publicly-funded plans that are provided by private insurers. They operate much like traditional insurance plans do but usually have much better rates.
- Part D covers prescription drugs that you can take yourself. That means drugs that are purchased at a pharmacy and are brought home with you.
You need to enroll in each of these parts to receive their benefits. You can enroll in as many or as few of these parts as you like. It’s completely opt-in. There are usually no downsides to enrolling in Part A, so most people do so immediately after qualifying.
However, depending on their circumstances, some people choose to wait before enrolling in the other parts. There are sometimes penalties for doing this, so it’s an important choice that needs to be thought over.
It’s Health Insurance for Older Adults
The program was first envisioned as coverage for older adults, who require more healthcare than younger adults. All American residents, not just citizens, over the age of 65 qualify for this coverage, provided they have lived in the U.S. for a sufficient period.
This service is paid for by a tax on income. If that tax hasn’t been paid for at least a decade by you or your significant other, you will need to pay a premium on Part A. Otherwise, Part A is completely free.
It’s Not Just for Older Americans
Younger adults with disabilities also qualify for this service. After being approved for disability, you can enroll in one of these plans after 24 months of continuous disability payments.
If you have kidney disease and need dialysis, you also automatically qualify and can enroll immediately.
It Covers Half of All Health Expenses
These parts of the health program together cover about half of all health expenses. Part C, the newest offering from the government, aims to fill these gaps in coverage. However, many Americans are dissatisfied with Part C’s coverage, and they turn to private offerings outside of the government.
These private coverage options, also called Medigap plans, aim to fill in the gaps left behind by traditional government health insurance. They come with fairly hefty premiums, but they often have out-of-pocket spending limits and low deductibles to make up for it. The government does not have any say in Medigap plans. They are plans that are entirely between you and a private health insurance company. You should be aware that Medicare eligibility is not based on income. However, your income is being used to determine your Medicare premiums.
Prescription Drugs Are Also Covered
The majority of prescription drugs are covered by Part D. Since this is an optional plan, you don’t need to enroll immediately. However, if you decide later that you want to enroll, you’ll only be able to do so during a short enrollment period each year. You’ll also be charged a permanent penalty each year for going without drug coverage. This can make Part D an unpalatable choice later.
Generally, it’s a good idea to enroll in Part D the moment you’re eligible if you expect you’ll ever need drug coverage later. The majority of older adults eventually need to take drugs to manage their chronic conditions, so consider this carefully.
