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Understand every part of Medicare: Part 1

Medicare | Jul 17, 2015



At face value, Medicare is relatively simple to understand. Created in 1965, it's a national social insurance program. It was designed to be used mainly by citizens who are no longer working, but have spent years paying into the system. The idea is that it would provide medical coverage for U.S. citizens aged 65 and older. Before the program was signed into law, many retired workers were not able to afford insurance and subsequent medical payments.

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Medicare changed that, but over the years more services have been implemented for further expansion. As a result, the social insurance can come off as quite confusing. However, it's important to gain a complete understanding of the components you may be in line to receive. This knowledge will help you make the best choice and ensure you're not missing out on anything. In particular, you should know the specifics and differences of Medicare Supplement and Advantage insurance.

Clearly understanding Medicare will let you focus on other areas to maintain health and have fun, such as low impact exercises.

Four different parts
Medicare is divided into four parts, each with its own distinction. Part A deals with hospital insurance, Part B is medical insurance, Part C allows private health insurance companies to provide Medicare benefits and finally, Part D offers subsidies on the cost of prescription drugs and drug insurance premiums

Parts A and B have been around since Medicare's inception and fall under Original Medicare. According to Medicare Interactive, this is the base level, fee-for-a-service program. All Medicare enrollees are given this plan, unless they specify otherwise.

Specific costs covered by Part A are: hospital admissions, food, tests and more. Part B, on the other hand, covers areas such as ambulance services and clinical research, according to official Medicare guidelines. Part D - enacted in 2003 - offers Medicare beneficiaries subsidized costs on prescription drugs. You are eligible for Part D if you currently receive Part A and B benefits. You can also receive subsidized prescription drugs through Part C.

When you decide to enroll in Medicare, you have two different types of coverage options: Medicare Advantage and Medicare Supplement Insurance, often referred to as Medigap. The second part of this series will highlight the differences in those options.