Samuels: The A, B, C and D’s of Medicare
BY LAURIE SAMUELS March 22, 2013 11:42PM
Updated: April 25, 2013 7:04AM
Today, retirees are faced with myriad retirement issues, with health insurance being at the top of their list. Understanding Medicare initially can be a daunting task, but once it is in place it can provide a retiree with needed peace of mind.
Medicare is government health insurance for seniors over age 65, those under age 65 with disabilities and any age for those suffering from end-stage renal disease. All participants have a choice between two separate plans — Original Medicare (sometimes called Traditional) or Medicare Advantage Plan.
Medicare benefits generally are encompassed in four parts — A, B, C and D. All participants automatically receive parts A and B either through Original Medicare or Medicare Advantage Plan.
Part A covers hospital insurance which includes inpatient care, skilled care in a nursing facility, some home health care and hospice care.
Part B covers medical insurance which includes most medically required doctor’s care, outpatient services, medical supplies, and preventive care.
Part C are for the participants that elect the Medicare Advantage Plan. Thus, this plan is an alternative option to Original Medicare allowing the choice of selected private health insurance companies contracted with Medicare. At a minimum, benefits from Parts A and B, as with Original Medicare, must also be provided by all participating companies although different rules, costs, and coverage restrictions may apply. Contracting companies include HMO (Health Maintenance Organizations), PPO (Preferred Provider Organization), Private Fee-for-Service Plans, Special Needs Plans, Medicare Medical Savings Account Plans. This program is provided to allow for a greater variety of options.
Part D provides for prescription drug coverage adding coverage to Original Medicare and to some Medicare Advantage Plans such as Private-Fee-for-Service-Plans and Medicare Medical Savings Account Plans. Coverage is optional for most plans depending on current coverage and needs. With Original Medicare this coverage would be purchased as stand alone coverage unlike Medicare Advantage where it is covered as part of any benefit package.
Keep in mind that Medicare provides a lot of coverage, but it does not cover all expenses — such as annual co-pays and deductibles. For this reason, some people choose to buy a separate policy to provide coverage for the areas Medicare does not cover — this is known as Medigap insurance. Medigap can be purchased from a private insurance company.
Laurie Samuels is a Retirement Income Consultant and Estate
Planning Attorney in Illinois.
Her boutique firm specializes in
protecting and maximizing
retirement accounts and other assets.
Abednego Wealth Management, 888-633-6119.