The ABCs of Medicare: Knowing the Basics
Over the past few years, American healthcare has undergone a huge overhaul. From the Affordable Care Act to Medicaid expansion, Americans are struggling to decipher the rules and regulations that apply to health insurance coverage. Elder law attorneys often advise clients on health coverage just as much as they assist with end-of-life and estate planning. Surveys have shown that as many as half of all seniors are confused about Medicare. Questions abound. What counts, and what does not? Do I need marketplace coverage or not? What about Medicare? Here the basics about Medicare coverage.
Part A – Hospital Coverage
For those turning 65, Medicare is a new animal to deal with. Unlike the private insurance plans of the past, Medicare breaks coverage up into four parts. Part A covers hospitalization, hospice care, and long-term nursing home care. However, there are limitations on coverage for some items. If you need nursing home care, Medicare will pay up to 100 days of skilled nursing care. The coverage is tiered, however, so it is important to know how and when Medicare will stop paying. Medicare pays for nursing home care in the following way:
- Days 1-20: Medicare pays for everything. You pay nothing.
- Days 21-100: Medicare pays for most of the care, but you will have a “coinsurance” payment of $161.00 per day in 2016.
- Days 101 and after: Medicare stops paying at 100 days. This means if you still require long-term placement in a nursing home, you will need to pay from your own resources or apply for and be approved for Medicaid, which is based on your income and assets.
Part B – Medical Coverage
Much like your former private plans, Medicare Part B pays for routine care, from office visits to X-rays. Just about everything you will need outside of a facility like a hospital or nursing home will be covered by Part B. Premiums and deductibles are set by law and cannot exceed an annual limit. In 2015, the typical premium is $104.90 and the annual deductible is $147.00. This represents a real value over private insurance for those over 65.
Part C – Medicare Advantage Plans
Part C is not really Medicare at all; it is the statutory provision that permits private insurance companies to offer qualifying private plans in lieu of the public Medicare option. While you pay a premium for the plan, just as you would with any other private insurance plan, Medicare in turn pays the insurance company. This helps alleviate some of the cost to the federal government for operating Medicare. It also allows people wider choices for coverage. However, regardless of the company selected, all plans must provide the same basic minimum coverage as traditional Medicare.
Part D – Drug Plan
Like many private insurance plans, Medicare offers prescription drug coverage that can greatly reduce the cost of medications. If you select a Medicare Advantage plan under Part C, the plan must include drug coverage that is as good as the traditional Part D plan would offer.
Costs and coverage may vary, so when selecting a plan it is important to consider pre-existing conditions and the possibility of nursing home placement. If you have questions about coverage or planning for long-term skilled nursing care, consider speaking with an experienced elder law attorney at the Millhorn Elder Law Planning Group in The Villages.