Samuels: The A, B, C and D’s of Medicare
BY LAURIE SAMUELS Guest Commentary March 28, 2013 8:56PM
Updated: May 1, 2013 1:57PM
Today, retirees are faced with myriad retirement issues, with health insurance being at the top of their list.
Understanding Medicare initially can be a daunting task, but once it is in place it can provide a retiree with needed peace of mind.
Medicare is the federal health insurance program for those over age 65, those under 65 with disabilities and those of any age who suffer from end-stage renal disease.
All participants have a choice between two separate plans — Original Medicare (sometimes called Traditional Medicare) or the Medicare Advantage Plan.
Medicare benefits generally are available in four parts — A, B, C and D. All participants automatically receive parts A and B either through Original Medicare or Medicare Advantage.
Part A covers hospital services, which include inpatient care, skilled care in a nursing facility, some home health care and hospice care.
Part B covers most medically required doctor’s care, outpatient services, medical supplies and preventive care.
Part C is available for those who choose to participate in the Medicare Advantage Plan. Thus, Part C is an alternative to Original Medicare — allowing the patient a choice of selected private health insurers who have contracted with Medicare.
At a minimum, Part A and B benefits, as with Original Medicare, must be provided by all participating companies although different rules, costs and coverage restrictions may apply.
Contracting companies include health maintenance organizations (HMO), preferred provider organizations (PPO), private fee-for-service plans, special needs plans and Medicare Medical Savings Account plans. This allows for a greater variety of options.
Part D provides prescription drug coverage — adding coverage to Original Medicare and to some Medicare Advantage plans such as private-fee-for-service and Medicare Medical Savings Account plans. Part D coverage is optional for most plans depending on current coverage and needs.
With Original Medicare, Part D would be purchased as standalone coverage, while under Medicare Advantage it’s covered as part of any benefits package.
Keep in mind that Medicare provides a lot of coverage, but it does not cover all expenses — such as annual co-pays and deductibles.
For this reason, some people choose to buy a separate health insurance policy to provide coverage for the areas where Medicare does not — coverage known as Medigap insurance. Medigap can be purchased from a private insurance company.
Laurie Samuels is an estate planning attorney and consultant whose firm specializes in protecting and maximizing retirement accounts and other assets.
Abednego Wealth Management, 888-633-6119.