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Medicare is the federal health insurance program offered to Americans who reached the retirement age of 65 years. It consists of many parts and can overall be rather complicated. But understanding Medicare is important for both the patient and their care provider, as it often affects the scope of medical services covered and potential co-pays associated with such a service. Patients often ask their care providers to help them understand Medicare, so we outlined the basics below.
It refers to the combination of Part A and Part B coverage.
Medicare Part A (Hospital insurance)
Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. It is generally premium-free to seniors and begins when they start receiving retirement benefits.
Medicare Part B (Outpatient/ambulatory medical insurance)
Part B covers certain doctors' services, outpatient care, medical supplies, and preventive services. It usually covers both primary care provider and specialist care. The premium for Part B is taken directly out of the patient's SSI and there are penalties for those who elect to opt-out of coverage. The longer a person waits to enroll, the more penalties they will pay later on when they do enroll in coverage.
Medicare Part D (think "D" for drug, as prescription drug coverage)
Medicare D helps cover the cost of prescription drugs (including many recommended shots or vaccines). This coverage is optional although highly recommended when enrolling in Part A/B as there are penalties for late enrollment. For couples earning less than $23,517 per year, there is no premium for Part D coverage.
Medicare Part C - Medicare Advantage/Choice (aka. Managed Medicare such as Aetna Medicare, Cigna Medicare, etc.)
Part C Medicare plans are privately offered Medicare plans that combine Part A, Part B, and often include Part D. They generally have lower monthly premiums, so are sometimes a better fit for patients who rarely see a doctor. About 40% of seniors are enrolled in Medicare Advantage plans. Patients are able to switch between traditional and Part C coverages once per year but there are many factors that are important when deciding on coverage and every patient will benefit differently - that is why it's crucial for patient's to speak with an unbiased counselor during their enrollment.
Supplemental Medicare coverage (aka. Medigap, or employer-specific retiree benefits)
Medical services covered by Medicare Part A and B often still have a coinsurance, deductible, or otherwise "out-of-pocket expense" that's owed by the patient. In scenarios when these costs become prohibitively expensive for patients, they will often find a Medigap plan beneficial. Medigap covers most (often, all) of the patient's financial responsibility.
The most common misunderstanding in Medicare is when seniors confuse Medigap and Medicare Part C coverages. Of course, leave it to Medicare to be as confusing as possible - listing the types of Medigap as A, B, C, D, F, G, K, L, M and N. Each of these lettered Medigap plans is different, with varying degrees of shielding from excess healthcare costs. Adding further confusion to the mix is requirement for the patient who must enroll in Medigap during their Initial Enrollment Period (7 months following official retirement). During this period, Medigap can't deny patients for coverage for any reason, but if a patient fails to enroll during this period, they can be denied or have prices set higher due to their health status or prior insurance usage.
It’s important your staff has the basic understanding of Medicare, so you can help your patients navigate towards the most beneficial plan. Download a free 2021 Medicare handbook here.