Medicare is a federal program that was designed in the mid-sixties. It was intended to provide health insurance for senior adults age 65, those with disabilities, or with end stage renal disease. The fundamental thought behind the program is to have the entire working society contribute into the program to support those who need it by means of tax. By spreading out the contributions, financial risks would be lessened and costs could be more manageable.
Medicare consists of the following:
- Part A – covers your hospital, hospice and some home health care expenses. This portion is normally no charge as long as you have paid into the system via payroll taxes. For those who did not pay in can purchase Part A for a high premium
- Part B – covers your physician and outpatient services. Most people pay $104.90 (in 2013) for Part B, but those with higher incomes can pay more.
- Part C – this is also known as Medicare Advantage, and incorporate both A and B, as well as drug costs under one plan. Many of these plans are a low to no premium option, as benefits are being managed by the health plan
- Part D – covers medications. For many who chose to remain on Part A and B under traditional Medicare will need to secure a Part D plan separately in order to have their medications covered. If you do not enroll in a Part D during your open enrollment period, you will be subject to penalty of 1% of the national base premium x the number of months you went without coverage
For individuals with higher incomes, the premiums for both Part B and Part D will be adjusted accordingly. This type of adjusment is known as Income Related Monthly Adjustment Amount or IRMAA, and is based on your Modified Adjusted Gross Income from the previous two years. In 2013 the IRMAA threshold was over $170,000 for those filing under married or filing jointly, and $85,000 for all other filing statuses.
Since Medicare only covers 80% of your eligible expenses, Health Exchange Quote Insurance Agency strongly recommends supplementing your traditional Medicare coverage. You can choose to keep original Medicare and obtain a supplemental medical and drug plan, or opt for Medicare Advantage which often comes at a low or no premium. Our agents will be happy to assist you in determining which option is best for you.
Make sure you enroll in Part A and Part B so we can assist you with your drug and gap coverage. You can do so most efficiently online http://www.medicare.gov/
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