A Simple Guide to Medicare
Medicare is a federally sponsored health plan for seniors. It is designed to provide full or supplemental health coverage for those over the age of 65, including hospital stays, surgery, prescriptions and other medical care. And while there are rumors that the Affordable Care Act (ACA) will eliminate Medicare, the facts are that the ACA is intended to breathe new life into this federal benefit.
Under the ACA, seniors will be provided with one or more free preventive doctor visits each year. These visits are for screening and determining your current state of health. The idea is that seniors can enjoy longer, more enjoyable lives if they are able to identify and receive treatment for some conditions before they become a medical emergency. Wellness exams, cancer screening and other preventive tests are an important part of healthcare reform.
Medicare Part A
Medicare Part A is hospital insurance. If a senior or other covered person must stay in a hospital, Medicare Part A pays for the costs. By default, this plan allows up to 60 days of hospitalization, but another 60 days of "lifetime" hospitalization can be tapped into for longer stays. Part A benefits can be applied to Inpatient services, nursing facilities, home health, and hospice services.
Medicare Part B
This part of Medicare is also called Supplementary Medical Insurance, or SMI. Medicare Part B is an enrolled, user participatory insurance plan. Members pay premiums on the plan, as well as copays or coinsurance for treatment provided. Medicare Part B is generally thought of as the part that pays for doctor visits, but this portion of Medicare also does quite a bit more. SMI covers Laboratory testing, medical equipment, vaccinations, medical supplies and equipment, ambulance services, and therapy services, among other things, including blood which is not covered Medicare Part A.
Medicare Part D
The Medicare Part D coverage gap, also known as the Medicare doughnut hole, is the difference between the initial coverage limit for prescription benefits and the catastrophic coverage threshold. Currently, beneficiaries that surpass the initial coverage limit are responsible for the entire cost of prescription drugs until this expense reaches a catastrophic point. After this point, the full cost of prescription drugs is covered by Medicare Part D. The ACA has already begun to address this problem by creating discounts on brand name and generic drugs purchased within the gap range and by 2020 measures will be taken to completely eliminate the doughnut hole.
Medicare, like other health insurance, includes deductibles that the patient must pay before the insurance becomes effective. In some cases, the deductible portion of your visit may be paid by another insurance contract, such as medigap. In other cases, the deductibles are paid directly through the Medicare program. Under Part B, the deductible is usually a single, flat fee that is determined when you enroll in the program. This deductible must be paid before Part B services will be available to you.
Medicare uses an established "fee for service" model to pay for care. In some cases, the hospital might get paid less than the care that was performed, in other cases they may receive more than the service would cost. Statistically, the two balance out and hospitals are able to continue providing care for Medicare patients. The 3 factors involved in determining "reasonable charge" are: 1) The physician's actual charge for the procedure, 2) The customary charge for the service (if different than the actual charge), and 3) local prevailing charge. Under Medicare, reasonable charges must remain within these limits with payment being the lesser of the three.