A question we hear all the time is, how does Medicare work?
It can be confusing, but here are the basics.
Medicare is the federal health insurance program for people who are 65 or older. It’s also available to younger people with certain disabilities, people with End-Stage Renal Disease and Amyotrophic Lateral Sclerosis – also known as ALS or Lou Gehrig’s disease.
Medicare Part A – hospital insurance, Medicare Part B – medical insurance, and Medicare Part D, prescription drug coverage.
Medicare Part A and B are generally referred to as “Original Medicare.”
So… to understand how Medicare works, let’s talk about Original Medicare.
Original Medicare is different from other forms of major health insurance – like the health insurance Americans get from their employer.
It’s different in four key ways:
The first thing that is different about Original Medicare is that it covers hospital care and medical care separately.
Part A is the hospital insurance.
It generally covers you when you’re admitted to a hospital, skilled nursing or nursing home facility, or when you receive hospice care or covered home health services.
Part B is the medical insurance.
It generally covers medically necessary care that either diagnoses or treats a medical problem, like the flu, in an outpatient setting – like a doctor’s office.
Part B also provides care aimed at preventing or detecting illnesses at an early stage.
The second thing that makes Original Medicare different is that it doesn’t limit your Out-of-Pocket medical expenses.
When we talk about out-of-pocket medical expenses that means charges you have to pay yourself.
Those charges include things like copayments, deductibles, and coinsurance.
One example is, when you’re admitted to the hospital, Part A has a deductible. After you’re released from the hospital that deductible can reset .
An example of Part B out-of-pocket costs is that you’ll have to pay 20% of approved medical costs, after you pay your deductible.
The third way that Original Medicare is different from other types of health insurance is that it doesn’t cover prescription drugs, in most cases.
Prescription drug coverage is available through a separate program called Medicare Part D.
Finally, the fourth way Original Medicare is different is that it doesn’t have standard “Provider Networks.”
What that means is that the amount you pay to see a doctor can vary, depending on whether or not your doctor participates in Medicare.
At eHealth, we hope that, once you understand how Medicare works, and how its different from insurance you have made in the past, you’ll be better prepared when its time to enroll.
Medicare has neither reviewed nor endorsed this information.
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