THE BASICS OF MEDICARE

WHAT IS MEDICARE?

Medicare is the federal government program that provides health care coverage (health insurance) if you are 65+, under 65 and receiving Social Security Disability Insurance (SSDI) for a certain amount of time, or under 65 and with End-Stage Renal Disease (ESRD). The Centers for Medicare & Medicaid Services (CMS) is the federal agency that runs Medicare. The program is funded in part by Social Security and Medicare taxes you pay on your income, in part through premiums that people with Medicare pay, and in part by the federal budget.

PARTS OF MEDICARE

Part A covers inpatient hospital stays, skilled nursing facility (SNF) stays, some home health visits, and hospice care. Part A benefits are subject to a deductible ($1,600 per benefit period in 2023). Part A also requires coinsurance for extended inpatient hospital and skilled nursing facility stays.

Part B covers physician visits, outpatient services, preventive services, and some home health visits. Many Part B benefits are subject to a deductible ($226 in 2023) and monthly premium ($164.90 in 2023), and, typically, coinsurance of 20 percent. No coinsurance or deductible is charged for an annual wellness visit or for preventive services that are rated ‘A’ or ‘B’ by the U.S. Preventive Services Task Force, such as mammography or prostate cancer screenings.


Part C refers to the Medicare Advantage program, through which beneficiaries can enroll in a private health plan, such as a health maintenance organization (HMO) or preferred provider organization (PPO), and receive all Medicare-covered Part A and Part B benefits and typically also Part D benefits. Enrollment in Medicare Advantage plans has grown over time, with more than 20 million beneficiaries enrolled in Medicare Advantage Plans.


Part D covers outpatient prescription drugs through private plans that contract with Medicare, including stand-alone prescription drug plans (PDPs) and Medicare Advantage plans with prescription drug coverage (MA-PDs). The Part D benefit helps pay for enrollees’ drug costs and provides coverage for very high drug costs. Additional financial assistance is available for beneficiaries with low incomes and modest assets. Enrollees pay monthly premiums and cost sharing for prescriptions, with costs varying by plan. Enrollment in Part D is voluntary.

MEDICARE VS. MEDICAID

The difference between Medicaid and Medicare is that Medicaid is managed by states and is based on income. Medicare is managed by the federal government and is mainly based on age. But there are special circumstances, like certain disabilities, that may allow younger people to get Medicare. Medicaid is a way to get health care at a lower cost or sometimes at no cost to you. Medicaid is managed by each state, so the eligibility requirements can change from state to state. Some people qualify for Medicare because of age (they’re age 65 or older) or due to having a disability. They’re also eligible for Medicaid because they meet the requirements to qualify for Medicaid in their state. These people are “dual eligible” because they’re eligible for both Medicaid and Medicare.

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