Medicare is our country’s health insurance program for people age 65 or older. (Certain people younger than age 65, particularly those who have disabilities, can also qualify for Medicare, but they must meet other specific criteria.) Medicare, however, does not cover all medical expenses or the cost of most long-term care. Medicare looks vastly different than it did just a few years ago. Here is a breakdown of the different parts of Medicare:
Part A
Medicare Part A covers hospice care, home health care, skilled nursing facilities, and inpatient hospital stays.
Part A helps pay for hospital or short-term nursing home care, hospice services, and some home health care. Most people age 65 or older who are citizens or permanent residents of the United States are eligible for “free” Medicare Part A. Although you don’t pay a premium, there are some co-payments and a yearly deductible.
Part B
Medicare Part B covers doctors’ bills, outpatient hospital care, home-based physical therapy, lab tests and a limited number of prescription drugs. Part B is optional and there is a monthly premium and an annual deductible.
Part D
Part D is optional prescription drug coverage which is available to all people who are eligible for Medicare. Plans are offered through insurance companies and other private companies. There is a monthly premium, a yearly deductible and a co-payment.
Medicaid
Medicaid is only available to low income individuals. If you qualify as having a low income, Medicaid pays for certain medical and long-term care services, prescription drugs, and nursing home care.
Medicaid is a state-run program. Each state has its own rules about who is eligible and what is covered under Medicaid. Some people qualify for both Medicare and Medicaid.
Medicaid planning often requires forethought, because a person must have very few assets to qualify for Medicaid coverage. The limit may be as low as $2,000, excluding the value of a home and possibly a car. A person must "spend down" before becoming eligible. Eligibility requirements and rules about spending down vary by state. Because rules change frequently, planning strategies must follow suit. An elder-law attorney with Medicaid experience can provide the best guidance.
“Medigap” policies
These supplemental policies, offered by private insurance companies, are designed to close some gaps in Medicare coverage. Medigap policies may help pay certain fees, such as copayments and deductibles, as well as the portion of doctors' bills not paid by Medicare. There are two main types of policies: Medigap and Medicare Advantage. Medicare Advantage is often called “Medicare Part C,” because people with Medicare Parts A and B can choose to receive all of their health care services through a private insurance company under Part C.
For more information, visit www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227)