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Medicare Explained

Medicare, was launched back in 1966 for people over 65 years old. It is termed the national health insurance program for the United States and is administered by the federal government’s Social Security Administration. Medicare is funded by taxes from employee payrolls and beneficiaries. The government also subsidizes part of the coverage. Medicare's goal was to cover enrollees over 65 years old for at least half of their healthcare costs while they cater for the other half either out-of-pocket or through supplemental plans. In order to qualify for Medicare, one either has to be 65 years of age or older or be on social security disability or have End Stage Renal Failure.

Medicare is divided into Part A, Part B, Part C and Part D

Medicare was designed to offset healthcare costs for persons over the age of 65 and those with certain disabilities. Initially, Medicare consisted solely of hospital insurance but was later tweaked to cover additional services such as prescription drugs. This led to Medicare being categorized into four (4) distinct parts: Parts A, B C, and D.

Medicare Unpacked

Part A of Medicare is the actual meat and potatoes of the plan and covers actual hospital insurance. It covers anyone who is found eligible, namely 65 years or older, anyone under social security disability and those with chronic kidney failure. Treatment includes hospital stay, skilled nursing care, and hospice facilities. Home healthcare can also be covered in some cases. Medicare was not intended to provide coverage for custodial or long-term care. Part A enrollees need not pay a premium.

Medicare Part B has been labeled medical insurance and it aims at providing medically-necessary services such as lab tests, doctors' services, diagnostics, therapy and general outpatient care including some preventive screenings. It is intended to supplement Medicare Part A and a premium is charged (although it is optional).

Medicare Part C is called the Medicare Advantage. It has more or less the same coverage as Parts A and B with the only difference being its benefits are administered by private insurers rather than the federal government. Enrollees pay their premiums directly to this private insurer. Medicare Part C is also optional and enrollees can opt for it instead of Parts A and B. Medicare Advantage has often been referred to as supplemental insurance because it covers the gaps left by Medicare.

Medicare Part D involves prescription drug coverage and is only offered through private companies which are government-certified and approved by the Centers for Medicare and Medicaid Services. It is also optional and enrollees have to pay a premium directly to the private insurance company.

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