What is Medicare?

Published by Mike Lovell on August 16, 2017August 16, 2017

What is Medicare?

If you are on Medicare then you probably received the 130 plus page booklet called Medicare and You.  It’s a very helpful guide but I can understand it’s not the most exciting reading material for people.  There is a lot of good information in it so it’s important to keep handy.  If you are in Wisconsin, then you are especially lucky because you get another 50 plus page booklet.

Medicare is health insurance for people 65 or older, people under 65 with certain disabilities, and people of any age with End-Stage Renal Disease.

Medicare consists of 4 parts but isn’t intended to be comprehensive coverage so there are certain gaps that need to be filled.

• Medicare Part A covers hospitalization as well as other services. These include:
  • Hospital care
  • Skilled nursing facility care
  • Nursing Home Care (provided it is simply custodial care)
  • Home Health Services
  • Hospice

• Medicare Part B covers most doctor services that are medically necessary. It also covers:
  • Preventative care
  • Durable Medical Equipment
  • Hospital outpatient services
  • Lab tests and x- rays
  • Mental Health Care

Together Parts A and B combine to be what is known as “Original Medicare”

• Medicare Part C – This is referred to as Medicare Advantage.  It includes all benefits covered and Parts A and B but is operated by a private insurance company.
  • All of these companies must be approved by Medicare to offer these plans which may include extra benefits and services not included in Original Medicare
  • Many times these plans will include prescription drug coverage

• Medicare Part D – Prescription drug coverage which obviously helps cover the cost of prescription drugs.  This is also run by private insurance companies which are approved by Medicare

Do I need to get something to cover all 4 parts of Medicare?

These are the 4 parts to Medicare which gives you just a bit of information to start down the path of figuring out what is the best fit for you moving forward.  People typically take 1 of two routes first.  The first step is deciding whether you want to remain with Original Medicare or choose a Medicare Advantage Plan.

Let’s review high level what each choice looks like starting with Original Medicare

1. Original Medicare
   1. Medicare provides this coverage directly
   2. You have the freedom to choose your doctors or hospitals for treatment as long as they accept Medicare – aka no referrals needed
2. Do you want prescription drug coverage
   1. Original medicare does NOT cover prescription medications so it’s helpful to find a private plan that can reduce your costs for medications you are taking now or could be taking in the future
   2. If you don’t get a plan when eligible then you could be penalized later if you did not have creditable coverage
3. Do you want supplemental coverage
   1. This can fill in the gaps of Original Medicare so that you only pay a monthly premium.  This makes it much easier for budgeting because you don’t have to worry about medical deductibles, copays, or additional costs.  You still get the freedom of choice that Original Medicare gives you which many seniors enjoy.

The other option for seniors is Medicare Advantage

1. Medicare Advantage combines part A and B coverage but you receive the benefits from a private insurance company instead of directly from Medicare.  You still have to pay your part B premium to be eligible for this coverage.
   1. Medicare Advantage plans typically offer lower monthly premiums compared with a supplement and prescription drug plan.  You often lose flexibility to gain that monthly savings because you may need to use network doctors and hospitals or risk paying much more for your coverage.
2. Does my Medicare Advantage plan need to include prescription drug coverage?
   1. Most Advantage plans do include prescription drug coverage but some do not. This is important to know because in most cases, you are not able to combine a stand alone prescription drug plan with a Medicare Advantage plan.

How do I know what option is right for me?

There are several resources available starting with medicare.gov.  Many seniors still have questions because there are aspects that don’t show up on the site that can be important to know.  A great resource is finding an independent agent that can offer Medicare supplements, prescription drug plans, and Medicare Advantage plans.

This person can be truly unbiased because there is no incentive to push one route or carrier over another.  You also don’t have to worry about compensating them for their time or efforts in helping you.

Mike Lovell