Many people mistakenly believe that there is just one Medicare plan for everyone. The truth is, Medicare is comprised on several parts and individuals may participate in one or more parts.  Here is a quick rundown on how it is broken up:

  • Medicare Part A covers most hospital costs, limited nursing homes costs, some home health services, and respite care.
  • Part B applies to physicians’ charges, ambulance services, some home health care, and durable medical equipment such as walkers, motorized carts, and the like.
  • Part D provides limited coverage for prescription drugs.
  • Part C applies “managed care” concepts to the benefits of Medicare Parts A, B, and D.

It should be noted that Medicare does not cover all medical costs. In reality there are many coverage gaps in Medicare.

First, like most private health insurance plans, Medicare has a number of deductibles and requires co-payments. For example, Medicare Part A covers all hospital costs incurred in a single stay except for an annually adjusted deductible of $1,156 (2012). Other “per illness” and “per stay” deductibles may also apply to hospital stays.

In addition, physician charges under Medicare Part B are split between the Medicare program and the patient, with the patient being responsible for twenty percent of the “approved charge.” Furthermore, care administered outside of the United States is excluded entirely from Medicare coverage.  So for those Prime Timers heading off to Germany in late November, make sure to get a checkup before departure. The combination of these costs – deductibles, co-pays, and exclusions – results in Medicare paying only an estimated 48 percent of health care costs incurred by the elderly, and explain why about 90 percent of Medicare beneficiaries also carry some form of private supplemental coverage, such as Medigap.  For more information please visit Medicare’s website

Another important thing to mention is that Medicare Does Not Pay for Long-Term Care.  Long-term care includes a wide range of care associated with helping individuals perform various activities of daily living (ADLs).  

Medicare certainly isn’t immune to controversy, but it’s our social insurance for now.  Make sure you understand what you are eligible for as well as the associated costs of the program.  If the potential costs are significant for certain health issues there are strategies out there to mitigate some of those costs.  It is important to start the risk mitigation early so let us know if we can help.  We work with a number of specialists within Dane County and surrounding areas.

Have a great week!


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