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Medicare Basics


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Medicare Basics

Medicare is a national social insurance program administered by the U.S. federal government. It guarantees access to health insurance for Americans ages 65 and older, people with disabilities, and people with End-Stage Renal Disease (ESRD).

An Overview of Medicare Parts

Medicare has four parts: A, B, C and D. Each is designed to cover specific services based on different healthcare needs and budgets.

Part A (Original Medicare)

  • Hospital insurance that covers inpatient care in hospitals or a limited stay in a skilled nursing facility

  • Covers hospice and home healthcare

  • May pay up to 20% of total cost

  • Does not include services like routine dental and vision care

Part B (Original Medicare)

  • Medical insurance that covers doctors’ services, hospital outpatient care, and home healthcare
  • Covers some preventive health services, such as screenings for heart disease, diabetes, and some types of cancer
  • May pay up to 20% of total costs
  • Does not include services like routine dental and vision care

Part C (Medicare Cost Plans)

  • A type of HMO plan offered by private companies (like Scott and White) in certain areas of the country (like Texas)
  • Members can see out-of-network providers and pay Part A and Part B coinsurance and deductibles
  • May offer prescription drug coverage—if not, members can opt for Part D
  • Members pay a premium directly to Medicare
  • Can join any time it’s accepting new members

Part C (Medicare Advantage Plans)

  • Optional coverage offered by private companies (members don’t pay a separate premium to Medicare)
  • Covers all Medicare services, includes Part A, Part B, and sometimes Part D
  • Have an out-of pocket maximum of $6,700 per year by law

A Medicare Special Needs plan is a type of Part C Medical Advantage Plan for those who qualify for both Medicare and Medicaid. Some Special Needs Plans are only for people who have a chronic condition. Other Special Needs Plans require the member be institutionalized.

Part D (Medicare Prescription Drug Coverage)

  • Prescription drug coverage helping people with Parts A and B pay for prescription drugs