Medicare – Coverage for Older Americans


medicare card
Medicare card

Medicare is a health insurance program administered by the United States government, covering people who are either age 65 and over or who meet other special criteria. It is funded by a payroll tax that is split between the employer and employee, or by the self-employment tax.

There are four major parts:

  • Part A covers hospital care, skilled nursing facility care, hospice care, and some home health care.
  • Part B is medical insurance and covers medically necessary doctor’s services, preventive services, durable medical equipment, and some home health care.
  • Part C includes the Medicare Advantage Plans, sometimes called Medicare +Choice or just Part C. It allows the option to receive their benefits through private health insurance plans, instead of through the original Medicare plan (Parts A and B)
  • Part D is the Prescription Drug Plan (PDP). Anyone with Part A or B is eligible to purchase Part D from a private health insurance company. It may also be combined with a Medicare Advantage plan with prescription drug coverage (MA-PD).

It’s important to note that Medicare only pays a portion of your bills.  There can still be substantial out-of-pocket costs and deductibles.  There is no charge for Part A.  The cost for Part B varies depending on your income.  As with most government programs, there are a lot of ins and outs, and our Congress sometimes plays politics. The full details are available at the Federal website.

Medicare Advantage Plans (Part C) have been rapidly expanding.  They are offered by insurance companies and provide additional benefits on top of Parts A and B.  Prices vary with providers, location, and coverage.  There are several with no premium.  Higher premium plans may cover more of your deductibles and co-pays, and some offer extra benefits.  Many also include Part D prescriptions. Some also include health club, hearing, vision, and dental benefits.

Some insurance companies also offer plans called Medigap.  These aren’t true Advantage plans, they just piggyback on standard Medicare and reimburse you for some of your deductibles and copays. Medigap insurance is a type of supplemental health insurance designed to cover the out-of-pocket costs not covered by Original Medicare, such as copayments, deductibles, and coinsurance. It is offered by private insurance companies and is purchased in addition to Original Medicare. Medigap policies help pay some of the health care costs that Original Medicare does not cover.