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A quick guide to understanding Medicare

by Shannon Lee

Understanding the different parts of Medicare can be difficult. Each component means something different for your health care and your financial bottom line. Get a better understanding of your choices with this basic overview.

Many people might be familiar with Medicare as coverage for major medical situations, such as hospitalization or emergency services. But there is much more to Medicare. This quick guide is a tool to understanding the full benefits of the program.

A General Explanation of Medicare

Medicare is a health insurance program administrated by the federal government. It is designed to help those over the age of 65. However, individuals with certain disabilities are also entitled to it. In addition, those with Lou Gehrig's disease and advanced kidney failure are eligible for Medicare.

Understanding the different types of Medicare can be confusing. Here is a brief overview of the different Medicare "parts" and a few optional plans:

Medicare Part A

When you check into a hospital or long-term care facility, the admission is covered under Medicare Part A. Short-term health care and hospice care all fall under the auspices of Medicare Part A. It is free for participants, and most people are automatically enrolled at the age of 65.

Medicare Part B

When you visit your doctor, have outpatient tests, or receive other medical care that doesn't require checking into the hospital or long-term care facility, Medicare Part B kicks in. Though coverage is available for everyone who qualifies for Part A, Medicare Part B requires an annual deductible and a monthly fee.

Medicare Part D

Prescription drug plans fall under the umbrella of Medicare Part D. The plans are run by private insurance companies, so the amount of coverage may vary from one plan to another. Financial help might be available for those who can't afford the full cost of the prescription plans.

What about Other Medicare Plans?

There are several other plans that are often considered part of Medicare, but might not be. Here are a few of the most common plans often mistaken for Medicare:

  • Medicaid. This is not part of the Medicare plan. Medicaid is for those who have medical need but have low incomes and cannot afford medical care.
  • Medigap. These plans are administered by private insurance companies and cover the costs that Medicare does not. The cost depends upon the plan chosen.
  • Medicare Advantage. These are Medicare plans, but they are managed by private insurance companies. They might restrict the doctors you can see, and they usually cost more. However, these plans can combine Medicare Part A, B, and D into one package, which might make several aspects of care easier.

How Do You Qualify for Medicare?

If you are 65 years or older, a permanent resident of the United States, and worked in Medicare-covered employment for at least ten years, you should be eligible for Medicare. If you receive Social Security benefits, you can get Medicare Part A without having to pay premiums. If you qualify for Part A, you automatically qualify for Part B as well.

Medicare can be confusing, but your Social Security office is trained to help you with any questions you might have. If you have any questions about eligibility, coverage, and what you might have to pay, contact them at your earliest convenience.