Medicare

Medicare is the national health insurance program in the United States for Americans aged 65 and older. It also provides health insurance to younger people with disability status as determined by the Social Security Administration.

Medicare is divided into four Parts.

• Medicare Part A: providing hospitalization (inpatient, formally admitted only), skilled nursing (only after being formally admitted to a hospital for three days and not for custodial care), and hospice services. Medicare Part A is "free" - meaning you pay no premiums.
• Medicare Part B: provides coverage for doctor visits and other "outpatient" costs such as medical equipment and physical therapy. It also covers some preventive costs such as diabetes testing, glaucoma screening, and colon and prostate cancer screening. You must pay a monthly premium for Medicare Part B. The premium is based on your adjusted gross income.
• Medicare Part C: known as Medicare Advantage. These are private plans run through Medicare that, by law, must at least be "equivalent" to regular Part A and Part B coverage. But there's lots of variation among Part C plans. Some Part C plans provide significant coverage beyond what you get with Medicare Parts A and B - including, in some cases, prescription drug coverage - but not all. The better ones basically function like Medigap policies but are administered by Medicare rather than being wholly run by private insurance companies. If you have a Medicare Advantage plan, any Medigap policy you may have is redundant; Medigap won't pay if you are covered by Medicare Part C.
  
  The monthly premium varies widely depending on your state and the private insurer you choose, as well as whether you choose an HMO or PPO for your Medicare Advantage coverage.
  
  Click here for more Information: Medicare Advantage Plans
• Medicare Part D: provides prescription drug coverage. It is actually a separate policy you buy from a private insurer. Each private insurer has its own plan, but the general rules work like this: You pay a monthly premium for Part D coverage and may also have an annual deductible of no more than a few hundred dollars a year, if there is any deductible at all. Once you cover the deductible, your plan will then pay some - or all - of your drug costs, but only for the first $2,510 in total drug costs per year.
  
  Once you hit $2,510 you are in officially in the donut-hole. You do not receive any prescription drug coverage for annual costs that fall between $2,510 and $4,050. That's right: You pay 100% of costs that fall within that dollar range. Once your annual costs push past $4,050 you are covered again: you will pay just 5% of costs above $4,050 with Medicare picking up the other 95%.
• What is Medigap insurance? Medicare provides a lot of coverage, but it doesn't cover everything. So some people choose to buy a separate policy to provide coverage for the areas Medicare falls short on. This is known as Medigap insurance. You buy Medigap from a private insurance company.
  
  You can also use your Medigap policy to cover expenses you have under Medicare, such as annual co-pays and deductibles. It’s important to note, that if you opt for a Medicare Advantage Plan (Medicare Part C), any Medigap policy you have won't pay out. So if you decide to move into a Medicare Advantage Plan and you already have a Medigap policy, drop the Medigap.
  
  Click here for more information: Medicare Supplement Insurance
• Which Medigap policy should I buy? There are 12 standard Medigap policies to choose from (A through L). Medigap A is the most basic "core" policy. As you move through the alphabet, the plans add more coverage. For example, Medigap E will offer something that is not included in Medigap D, but will lack a coverage provided in Medicare F.
  
  There is no difference in plans offered by different insurers; plan details are all set by the government. (Important caveat: If you live in Massachusetts, Minnesota or Wisconsin, check with your state insurance company or a private insurer who operates in your state. Medigap policies in these states offer coverage different than the plans followed by the 47 other states.)
  
  If you and your spouse want Medigap coverage, you'll need to buy separate policies; spouses aren't covered together. The cost will vary depending on where you live, your health and, of course, the specific plan you choose.
  
  How to compare Medigap Policies
  
  Click here to visit the Medicare website