Medicare is a federally funded health insurance program for people 65 and older. If you have permanent kidney failure and require dialysis or a kidney transplant, or if you are under 65 and have certain disabilities, you may also qualify to receive Medicare benefits. Medicare is funded through payroll taxes paid by employees during their careers and their employers, as well as by monthly premiums, where necessary, paid after the employee signs up for benefits.
Medicare is divided into four parts. Part A covers hospital benefits, Part B covers provider (doctors, etc.) benefits, Part C – Medicare Advantage Plans*, and Part D provides prescription drug benefits.
There are exceptions, but in general, Medicare Part A coverage is free, but you will pay a premium if you elect to receive Medicare Part B coverage.
*Medicare Advantage Plans, available in many areas, allow those who have Parts A and B to receive all of their health care benefits, including prescription drug benefits, through one of the Medicare Advantage providers rather than directly through regular Medicare.
How Much Does Medicare Pay?
Please note that this is a general explanation and there are often exceptions to what will or will not be covered by Medicare.
Medicare has established an “allowed amount” for each of the qualified services you might receive as an in-patient in the hospital or as an outpatient through other providers. In general, Medicare will pay 80% of this “allowed amount.” If your hospital or other provider has agreed to accept Medicare assignment, they cannot charge you more than the remaining 20% of the “allowed amount.” They must “write off” the difference between the original charge and the “allowed amount.”
You can purchase supplemental insurance to help pay the 20% that Medicare will not pay, and you can also purchase a prescription drug plan to cover part of the cost of drugs that are not covered by Medicare. You will pay a monthly premium for each plan.
What About Deductibles?
You will be responsible for a deductible amount for Medicare Part A and Part B, which occurs annually each January.
The supplemental plans you purchase will also have deductibles, depending upon which you purchase.
Deciding what to do can be difficult! You can find a lot of information on the medicare.gov website, and you are wise to talk with a professional about the best supplemental plan for your situation, you can call us at (818)996-0662 and we’ll answer any questions you have.