What Is Medicare?
Medicare is a federally managed health insurance program for Americans who are either of 65 years of age and older, or individuals who are under 65 years old and have been receiving Social Security Disability Insurance (SSDI) for an extended period of time, or people with certain medical conditions such as End-Stage Renal Disease. Not to be confused with Medicaid, Medicare is federally funded, meaning taxpayer money is used to fund the program.
What Is Managed Medicare?
Managed Medicare is the term used when referring to plans purchased to cover the medical expenses that Original Medicare doesn’t cover. Sometimes referred to as Medicare Managed Care Plans, Managed Medicare plans are HMO and PPO plans offered by private health insurers.
The most popular term for Managed Medicare is Medicare Advantage. These plans may cost you more than sticking with Original Medicare Part A and B, but even with higher monthly premiums, you may end up saving more money on out-of-pocket costs in the long run.
The History Of Medicare
The term Medicare was originally used for a healthcare program for dependents and families of active military personnel, passed under the Dependents’ Medicare Care Act in 1956. However, the current Medicare program wasn’t signed into law until nearly a decade later under Lyndon B. Johnson under the Social Security Act. It was only then that the federally managed program known today as Medicare began providing healthcare to Americans over the age of 65 years old.
Over the years, changes have been made to the Medicare program, and the following are some of the most notable:
- 1972 - Medicare benefits expanded to include speech, physical, and chiropractic therapy. Coverage is also extended to individuals under 65 years old who receive Disability Insurance (SSDI) and individuals with End-Stage Renal Disease (ESRD).
- 1980 - Health Care Financing Administration (what would later become Centers for Medicare and Medicaid Services) is created, administering both Medicare and Medicaid programs. Medicare Supplemental (Medigap) plans were also created to help with costs Original Medicare doesn't cover.
- 1988 - Medicare Catastrophic Coverage Act of 1988 is passed, expanding Medicare to include outpatient prescription drug benefits and a cap on out-of-pocket expenses.
- 1989 - Medicare Catastrophic Coverage Act is repealed, but cost-sharing assistance is left intact.
- 1996 - Health Insurance Portability and Accountability Act (HIPAA) is passed to prevent fraud, waste, and abuse within the Medicare program.
- 2001 - Consolidated Appropriations Act is passed making extending Medicare benefits to individuals under 65 years old with ALS.
- 2006 - Medicare Part D goes into effect, subsidizing the cost of prescription drugs through a Part D or Medicare Advantage plan.
- 2008 - Medicare Part B premiums are based off income.
Why Was Medicare Created?
Medicare was created due to the private health insurance sector pricing out seniors over 65 years old, or denying them coverage altogether. The program was created to ensure American seniors had access to affordable healthcare, improving quality of life, health, and the average lifespan of US citizens.
Who Runs Medicare?
Medicare is run by the Centers for Medicare and Medicaid (CMS), which is a branch of the larger Department of Health and Human Services (HHS). As the Name suggests, the CMS also oversees the state-run Medicaid programs. Medicare was originally named the Health Care Financing Administration (HCFA) but later changed their name in June of 2001.
Is Medicare Free?
While Medicare Part A is generally free for most people, there is a premium associated with Medicare Part B. However, if you don’t qualify for free Medicare Part A, you will have to buy it.
Along with potential premium costs, there are also out-of-pocket expenses that you need to consider as well. While Original Medicare Part A and Part B cover the majority of your medical expenses, there will still be deductibles and other payments you will be responsible for. Here’s what you can expect to pay:
Medicare Part A Costs
Premium - Free or up to $422/month
Deductible - $1,340 each benefit period
Coinsurance - $0 to all costs (learn more about Medicare Part A coinsurance here)
Medicare Part B Costs
Premium - $130/month or higher (depending on income)
Deductible - $183 each benefit period
Coinsurance - 20% of Medicare approved amount for most services
What Does Medicare Cover?
Medicare coverage is some of the most comprehensive health insurance available on the market. However, in order to receive all your benefits and protect yourself from high medical bills, you’ll have to combine different plans.
Medicare insurance has 4 different parts, each part with their own benefits. On top of each part, there are also Medicare Supplement plans that fill in gaps in coverage, which are also referred to as Medigap plans. Currently, there are 10 Medicare Supplemental plans lettered A through N, that you can choose from. Here’s a breakdown of what is typically covered by each Medicare part.
Medicare Part A Coverage
Medicare Part A is part of Original Medicare and is sometimes referred to as Hospital Insurance. Medicare Part A covers the following:
- Hospital care
- Skilled nursing facility care
- Nursing home (conditions apply)
- Home health services
Medicare Part B Coverage
Medicare Part B is the other part of Original Medicare and is similar to traditional health insurance. Medicare Part B primarily covers 2 types of medical services, which are Medically Necessary Services and Preventive Services. Some of these services include:
- Clinical research
- Ambulance services
- Durable medical equipment (DME)
- Mental health services
- Limited outpatient prescription drugs
Medicare Part C Coverage
Medicare Part C is a bit different than Original Medicare in that they are sold through private insurers, and are essentially an all-inclusive plan that is required to cover what Original Medicare covers. When enrolled in Medicare Advantage, Original Medicare will still some benefits like hospice care or clinical research studies, but for the most part, your Advantage plan will cover most of your costs, including emergency and urgent care.
Medicare Advantage coverage also varies depending on the plan you choose. Some plans will be more comprehensive than others, while others will choose not to cover medical services that aren’t deemed medically necessary.
You can also get coverage for services like dental, vision, and hearing through Medicare Advantage, and other wellness plans as well. Depending on your plan. You can also get your prescription coverage through an Advantage plan.
Medicare Part D Coverage
Medicare Part D covers prescription drugs and is also known as drug coverage. Medicare Part D is available to Medicare beneficiaries enrolled in Medicare Part A and Part B as either a stand-alone plan or through Medicare Advantage.
What Medicare Doesn’t Cover
Original Medicare doesn’t cover everything, which is why there are private Medicare insurance plans that help supplement costs that aren’t covered by Part A and Part B. Here’s what Original Medicare Part A and Part B won’t cover:
- Long-term care
- Dental care (conditions apply)
- Vision care (conditions apply)
- Cosmetic procedures
- Hearing devices
- Routine foot care
Why Medicare Is So Important
There are obvious reasons the Medicare is one of the most important federal programs, and that includes putting healthcare in reach for millions of American Seniors. Without Medicare, individuals over 65 years old would either be priced out of the private health insurance market or simply denied altogether. The reason being is the insurance is a business, and it’s difficult to take on that much risk.
However, a lesser acknowledged reason that Medicare is important is that it eliminates the stress that used to be placed on the shoulders of family members. As we get older, medical bills tend to get more expensive right around the time we find ourselves on a fixed income, which is a dangerous combination.
Medicare also improves the quality of life and longevity here in the US, which includes keeping American seniors out of poverty. Prior to the establishment of Medicare, nearly 33% of seniors in this country were living in poverty. By the mid-1970’s, Medicare cut that number in half.
That’s why at FirstQuote Medicare we are committed to helping you find the best plans available with just the click of a button. Talk to experienced Medicare agents who will not only make sure all you medical needs are covered, but make sure you find the best pricing available in your area. To get started, simply enter your zip code.