Medicare is a social insurance program that is providing medical coverage for several Americans. If you are a health insurance agent and plan on working with older adults or an individual approaching age 65, it is very important to understand this government program.
Medicare is a federal health insurance program that is composed of two parts. It provides medical coverage for older adults and for those who qualify with a disability. Medicare has Part A – Basic Hospital Insurance and Part B – Supplementary Medical Insurance.
Every American age 65 or older and are entitled to Social Security benefits are also eligible for Medicare benefits. These benefits become available on the first day of the month, in which the individual turns age 65. Individuals under the age of 65 may also be eligible, if they have been receiving Social Security Disability benefits for at least twenty four months.
Part A provides benefits for inpatient hospital services for up to 90 days in each benefit period. Benefits also include payment for prescription drugs only while in the hospital. It should be noted that there is no coverage provided for the first three pints of blood that the individual may have received while in the hospital.
Under Part A, skilled nursing care is provided for up to one hundred days, in which the first twenty days are fully paid after the deductible is met. The next 80 days fall under the coinsurance amount of coverage. Home health services are provided for medically necessary home health visits as well as hospice care. Psychiatric hospital care is covered up to one hundred ninety days during the individual’s lifetime.
Part B provides supplementary benefits and is a voluntary medical insurance plan. Part B pays benefits for physician and surgeon fees, medical services and supplies, outpatient hospital services, x-rays, lab tests, and other services such as ambulance service and durable medical equipment. For Part B benefits, individuals pay a monthly premium and have an annual deductible. Under this plan, there are certain exclusions such as: eye and hearing examinations, routine physical exams, foot care, immunizations and private nurses.
Medicare Advantage Plans make up Part C of Medicare. These plans allow participants to opt out of the traditional Part A and B and enroll in a coordinated care HMO, PPO, PSO or a private fee for service plan. Health Maintenance Organizations (HMOs) require services to be provided by its own medical providers, except in an emergency. Preferred Provider Organizations (PPOs) allow individuals to receive services from providers outside the plan, but with higher cost sharing. Provider Sponsored Organizations (PSOs) are similar to PPOs, but they are operated by a group of physicians and hospitals. Private fee for service plans are similar to PSOs but they may pay providers more than Medicare recognizes and may charge beneficiaries additional premiums and other expenses.
For more information on private insurance and Medicare Advantage plans, contact your local health insurance agent.
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