What is Medicare?

For many people, the time after retirement can be a time of financial struggle. Often one hears the term “fixed income,” referring to the very limited income the elderly have. And to add to the problems, people usually gain more health problems as they age. Since their income is limited, they often cannot afford private health insurance. And, if their company does not offer them health insurance after retirement, they may be forced to do without. This is where Medicare comes in. Medicare is a federally funded insurance program, created for people over 65 who are in need. Occasionally, younger people with certain disabilities are also eligible for the program.

      Medicare covers quite a bit of health issues, but, unlike regular health insurance Medicare has many large gaps in what it will and will not cover. For example, the Federal Insurance will cover illnesses of which a patient will recover (acute illness), but it does not cover such things as home care or nursing home care for people with long term illnesses. Medicare also has a prescription drug plan, but it does not cover all of the cost of prescriptions. Medicare is broken down into four different types or plans.

 

     Part A is a free of charge insurance plan which will pay for inpatient hospital services, Hospice care, and even a limited amount of home health care. But, the benefits of part A are limited to only those circumstances. Part B does include a small premium charge and will help to pay for doctor visits, outpatient care, physical therapy and occupational therapy. Part C actually allows other health insurance plans to offer a Medicare like program to people. It must include all of the coverage of parts A and B plus it may include further benefits like dental.  Because part C is set up differently, patients can only see certain doctors or hospitals. The health care providers must be in a patient’s network. Part D is a prescription drug plan, which works with independent providers to offer prescription benefits.

 

     Since Medicare does not cover all costs, many senior citizens choose to purchase a supplementary insurance called Medicare Gap Insurance or MediGap. This insurance is regulated by the government and helps to defray the costs of healthcare not covered by the Medicare plan.