If you turn 65 this year and are considering what type of coverage you need, the number of options may seem overwhelming. There are several parts and plans that are unique to the Medicare system that you may not fully understand.
It is common for people to confuse the Medicare protection that they are automatically enrolled in with Medicare Supplement Insurance Plans. There are guidelines and standardizations to the program that help ensure that you have access to the plans that best suit your needs. One of the first things to understand is what plans provide which types of coverage.
The original Medicare program was signed into law as part of the Social Security Act of 1965 and consisted of Part A and B. The Medicare Supplement insurance plans came later.
Part A pays benefits for in-hospital stays and skilled nursing facilities. Individuals that receive Social Security or Railroad Retirement when they turn 65 are automatically enrolled in this program.
For most people, there is no premium required. If you have worked at least ten years in a position that contributed to Medicare, your benefits are available premium-free. For those who do not have enough Medicare covered employment, there is a premium.
The amount varies, based on how much you have contributed. Medicare Part B covers specific types of physician's services, outpatient and home health services, as well as certain durable medical equipment. It was originally intended to fill the coverage gaps left by Part A.
There are many types of therapy, vaccinations, and laboratory testing covered by this type of insurance. Enrollment is not mandatory and there is a monthly premium requirement. If you decide to remain enrolled in the original plan, it is likely that you will need Medicare Supplement Insurance plans to help cover the out-of-pocket expenses not addressed.
Medicare Part C and Part D are not Medicare Supplement Insurance plans, although they were not originally part of the program. Part C is also known as Medicare Advantage and it combines Part A, Part B and sometimes Part D.
As there are several parts bundled together, you get a greater level of coverage for a lower monthly cost. Part D is specifically for prescription coverage. The number of medications as well as their cost has increased significantly in recent years. This plan was created to help defer the out of pocket expenses. Supplemental plans are designed to help with the expenses related to co-payments, coinsurance and many other "gap" areas.