Medicare is a form of health insurance available from the federal government. Its job is to provide those who are 65 and older with a built-in level of care, covering a number of different services. But while Medicare can be a powerful service, it can also be confusing for those just starting out. In this post, we’re going to take a look at the benefits of Medicare, the negatives, which type is right for you: basically, everything you need to know.
Medicare is available to those that are 65 or older, as well as certain individuals with specific disabilities, and those with End-Stage Renal Disease (ESRD – a form of kidney failure that requires dialysis or transplant)1.
Most people using Medicare will fall into the over 65’s camp however, and so that is the group we will be focussing on here.
The Basics: Parts
Medicare is split into four separate parts:
- Part A – Covers hospital costs
- Part B – Covers routine care (visits from a physician, for example)
- Part C – Medicare Advantage Program (Bundles Part A, B and sometimes D into one plan)
- Part D – Prescription drugs
While this may sound somewhat comprehensive, it’s important to recognize that this is not an entirely comprehensive solution and there are some limitations.
For example, Part A insurance will only pay 100% of your hospital costs for up to 60 days (around two months). After this point, you will then need to pay a share of the cost. After 90 days, you will be required to pay 100% of the costs.
While this won’t be an issue in most cases, some illnesses can require ongoing care for many months, and this can become expensive if you only have Medicare.
Likewise, Part D will only cover certain medications, meaning that you may still have to pay for certain things. Part B also requires monthly premiums, meaning that you will be paying extra.
Also note that a number of different things are not included in your Medicare. For instance, if you need a medical alert system, then this won’t be covered whereas some forms of insurance will include these types of costs. The same is true for things like certain dental procedures. For instance, some Medicare Advantage plans might include routine dental services, but this will rarely extend to such things as dental implants.
For these reasons, it can be a good idea for those that are receiving Medicare to also consider additional insurance on the side. This can then ensure that you are covered for all eventualities, and if the insurance is on top of Medicare, then it should be cheaper. Some premium insurers will actually include Medicare Advantage Programs as part of their service.
Likewise, you may wish to get dental insurance on top of Medicare, even if you don’t take out a separate health insurance plan.
Signing Up
If you are enrolled in Social Security, then you will automatically be enrolled into Medicare when you turn 65. This means that you don’t need to change anything, and you can simply rest assured knowing that the basics of your medical care will be covered by the state. However, if you aren’t currently receiving Social Security, then you need to make sure you manually sign up before you turn 65. If you do not, then you may be required to pay more for the same services. Part B services will increase in cost by 10% each year if you fail to sign up, so it’s important to act quickly.
You can also sign up prior to turning 65 – up to 3 months before. This can be a good way to ensure that everything is in place ready, and it’s a good idea to do this as soon as possible. You’ll find that you are less likely to experience a gap in your insurance this way too, when you transfer from your current insurer to Medicare.
Medicaid
Medicaid is a service that provides health coverage to millions of Americans, including low-income adults, elderly adults, children, and more. The program is run by states (based on federal requirements) and funded by a combination of the state and federal government.
Some people find they get confused between these two programs, as they are each concerned with paying for medical services and expenses. The key difference is that Medicaid is a public assistance healthcare program for those on low incomes regardless of age, whereas Medicare is an age-based federal program.
Medicaid covers different services depending on your state laws. Often included are outpatient hospital services, nursing home care, laboratory and x-ray diagnostics, transportation to medical facilities, tobacco counselling for pregnant women, and more.
Why Might You Need Both?
When comparing plans and options, it’s useful to look carefully into what is covered and what is not. One key difference between Medicare and Medicaid for the elderly, is that Medicare does not provide nursing home care, whereas Medicaid does. Medicare pays for skilled nursing and short-term rehabilitation, but not for ongoing care in a home3.
This is an important consideration, and makes options such as FIDA plans more appropriate.
FIDA Plan
A FIDA healthcare plan is a managed healthcare plan that combines the separate benefits of Medicare and Medicaid into a single plan3.
This plan ensures that your medical and home care services work around your specific requirements so that you can live comfortable in your home the way you see fit. This is a flexible plan that is very much client-centric.
The plan has multiple benefits. For instance:
- You and your care team – including the doctor – manage all of your healthcare and home care keeping things easy and straightforward
- You can keep your existing doctor
- You don’t pay any monthly premiums, co-pays or other costs
What You Get
The following services are all covered at no additional cost if you use in-network providers and out of network providers:
- Care from your physician
- Transportation for visits
- Immunization
- Lab tests
- Scans
- Over-the-counter/brand name drugs
- Occupational therapy
- Speech therapy
- Physical therapy
- Rehabilitation
- Urgent care and attention
- Skilled nursing
- Ambulance services
- Hearing exams
- Eye exams
- Glasses
- Contact lenses
- Dental checkups
- Hearing aids
- Supplies and services for diabetes
- Mental health services
- Substance abuse help
- Inpatient mental health
- Housekeeping services
- Healthcare services
- Adult daycare
- Meal delivery
- Respite care for caregivers in the family
- Nursing facilities
- Assisted living services
If you choose to use an out of network provider then the provider must be eligible for Medicare participation. If you choose an ineligible provider then you will have to pay their costs, otherwise they will be covered by the plan.
This is not a comprehensive list and there are a wide range of additional services and benefits available.
Medigap
Another option is Medigap. Medigap is essentially a premium policy from a health insurance company that is designed specifically to fill the gaps not covered by Medicare5. We already discussed the benefit of using insurance companies on top of Medicare, but by using a Medigap policy, the terms will be designed specifically to complement one another, resulting in a comprehensive protection.
There are lots of options for seniors looking to ensure they are looked after financially and medically as they get older. This post has hopefully served as an introduction to some of those options. But most important is to carefully read the fine-print on all policies before you sign anything!