Medicare is confusing. There’s a bunch of letter and numbers and percentages that can make anyone’s head hurt. At Gardner and Company, we feel that knowledge is power and the better you understand your benefits and rights under Medicare, the easier your transition to Medicare will be. Because each part has so much information, our next several blogs will be dedicated to getting to know Medicare more intimately. Each blog post will feature a Medicare “Part”, along with a detailed explanation of how that part works to form a comprehensive medical plan, and the bottom line that you need to know when you use each part.
Today’s blog will be explaining WHAT exactly Medicare is, WHY it exists, and HOW it’s different from Medicaid.
On July 30, 1965, President Lyndon B. Johnson signed into law the bill that led to the creation of the federal Medicare program after Americans over 65 found it increasingly more difficult to obtain health insurance upon retirement. The original Medicare program included Part A (Hospital Insurance) and Part B (Medical Insurance). Today, these 2 parts are called “Original Medicare” and Medicare has been expanded over the years to include other provisions such as Prescription Drug coverage. Medicare is the federal program that provides coverage to individuals over 65, disabled individuals under 65 who have received SSDI payments for a certain period, or under 65 with End Stage Renal Disease. The program is paid for by culmination of taxes paid on your income, Medicare premiums paid by those enrolled in the program, and the Federal budget. The federal agency that oversees the Medicare program is the Centers for Medicare and Medicaid Services, or CMS.
Original Medicare is composed of Part A, Inpatient benefits, and Part B, Outpatient benefits. Part C is a private insurance plan that combines A & B into one plan that works like a group plan’s PPO or HMO. Part C DOES NOT REPLACE MEDICARE. It simply combines the Inpatient and Outpatient portions into one privately managed plan. Part D is Prescription Drug Coverage, which you will need whether you decide to go with Original Medicare A & B -or- Part C. We will go over each part in detail as the blog series progresses.
The most important take away is that Medicare will NEVER EVER EVER be ZERO cost. There are premiums, copays, and coinsurances involved. Which plan you have will determine what those amounts are. Therefore, understanding Medicare and your choices is so important- the plan you choose will ultimately decide your Out of Pocket costs. For instance, with Original Medicare you can go to any doctor in the country, however with a Medicare Advantage Plan (Part C), you have a limited network determined by your provider. Medicare Advantage Plans (Part C) can also offer additional value-added benefits, such as dental coverage or gym memberships.
Everyone who has Medicare will receive a red, white, and blue card from CMS. If you are using Original Medicare, this is the card you provide to your doctor or hospital at the time of your visit. If you opt for a Medicare Advantage Plan (Part C), you will still receive the red, white and blue card, but you will receive another ID card from the insurance carrier you signed up with that will be given to your healthcare providers at the time of your visit. No matter what coverage you decide to go with, NEVER give out your Medicare number except to your healthcare and insurance providers.
Medicare and Medicaid are often confused but are very different. While both are programs administered by the Federal government/CMS, Medicare coverage is for those over 65, or those under 65 with a disability; Medicaid is coverage for individuals with limited income or experiencing economic hardships. Eligibility for Medicare is not determined by income, but for Medicaid it is, along with other factors. It is important to note than an individual can be DUAL ELIGIBLE- meaning they are eligible for both Medicaid AND Medicare. If you feel this applies to you, contact our office and we can assist you with determining whether you meet Low Income Status.
Medicare can seem like a horrible algebra equation with its letters and numbers but understanding the differences in coverage and what your options are is critical when it comes to how much money you spend on your healthcare in your retirement years. Stay tuned for our follow up blogs that will delve into each Part of Medicare in detail and explore what that means for you and your options.
For more information on Navigating Medicare, call us today at 904-737-3636 and let Bill Gardner, The Medicare Guy, be your Navigator.