Medicare Must-knows

By Chelle Cordero

January 12, 2018 5 min read

Medicare is a United States government program to assist the elderly, disabled and those with specific medical conditions with medical insurance coverage. Original Medicare is a fee-for-service health plan that has two parts: Part A (hospital insurance) and Part B (medical insurance). Signed into law in 1965 by President Lyndon B. Johnson, it was an attempt to cover health insurance for the elderly and disabled.

Any U.S. citizen (for at least five years) who earned a minimum of 40 points (quarters of qualifying work) is eligible for free Part A coverage upon reaching his or her 65th birthday. Initial Medicare enrollment for seniors is within the three months before and after the month in which they turn 65. Everyone turning 65 should sign up for Medicare through Social Security -- whether or not he or she is still working or covered by another insurance policy to avoid fees and penalties later on. Any person who has been receiving Social Security disability benefits qualifies for Medicare the 25th month of his or her disability. Patients diagnosed with end-stage renal disease or Lou Gehrig's disease can sign up for Medicare coverage without waiting. But Original Medicare is not designed to cover all of a beneficiary's medical costs.

Original Medicare consists of Part A and Part B; the patient pays a deductible and then Medicare pays the Medicare-approved amount. Medicare has been expanded to provide a much more comprehensive coverage of health care for the elderly and disabled. Elective add-ons include Part D for prescription coverage through private insurance companies. Part C is called Medicare Advantage and provided from private insurance companies who have contracted with Medicare; Medicare Advantage combines A and B, and Medicare Advantage Drug combines Parts A, B and D. Plans F and G are supplement insurance plans that cover Medicare Part B excess charges, the difference between what a provider charges and the amount Medicare will pay.

At this time, there are no major changes in store for the 2018 Medicare program -- with the exception of expected higher premiums. For seniors who did not work at least 40-qualifying quarters in their career, Part A coverage can cost up to $422 per month in 2018. Part A hospital inpatient deductible and coinsurance can have upwards of a $1,340 deductible for each benefit period. The standard Part B 2018 premium is $134 per month with a $1,316 deductible for each benefit period. Part C and Part D premiums vary by plans. Seniors and disabled with limited finances may be eligible for assistance in paying for Part B and other supplemental policies through their state's Medicare/Medicaid programs.

It certainly sounds confusing, but the decisions and possible repercussions are important. While the federally run Medicare program operates similar to a single-payer health care system, it may only 80 percent of any given medical cost. The balance of the cost of service must be paid out of the consumer's own pocket or covered by a supplemental insurance policy (with premiums paid by the consumer). The Medicare open enrollment period for 2018 was Oct. 15 to Dec. 7, 2017; this annual period is allotted to allow Medicare beneficiaries the opportunity to shop around for plans that will help supplement their insurance coverage. Plan premiums can vary, as well as the services and networks covered. Consumers should look at their own health histories and lifestyles costs, such as travel and finances in order to make an educated decision for the coming year.

There is help in understanding the benefits and deficits of any given program and making an informed decision. The State Health Insurance Assistance Programs provide free, in depth, one-on-one insurance counseling and assistance to Medicare beneficiaries, their families, friends and caregivers. SHIPs operate in all 50 states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands, and are grant-funded projects of the federal U.S. Department of Health and Human Services and U.S. Administration for Community Living. Contact SHIPs and use the state locator to find someone who knows your specific state's guidelines and offerings.

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