Medicare is designed to help U.S. senior citizens age 65 and older pay for health care costs in retirement. Financial retirement planning begins with understanding the types of long-term care, deductibles, and co-payments not covered by Medicare, as well as understanding premiums and coinsurance rates that must be paid.
The general parts of the federal health care program for seniors are administered under Medicare Part A, Medicare Part B, and Medicare Part D. These are the ABDs of the federal senior health care system. The cost of Medicare premiums and coinsurance rates for 2010 are published by HHS.gov. Additionally, access the Medicare Prescription Drug Costs Estimator at the official government web-site for Medicare.
Brief Overview of Medical Coverage- What is Medicare Part A?
Part A is the first part of Medicare and covers emergency and non-emergency inpatient hospitalization; post-hospital inpatient care in an approved skilled-nursing facility (SNF); and post-hospital home health care or hospice care (for the terminally ill) also known as critical access hospitals. Medicare Part A’s cost coverage includes, but may not be limited to the following: semi-private room with meals, X-rays and laboratory testing, coronary or intensive care, blood transfusions, and regular nursing services.
A patient pays a deductible for each “benefit period” when inpatient hospital care service is used. A full cost covered benefit period runs from the time of hospitalization until 60 consecutive days after discharge. After 60 days, the patient must pay part of the daily hospitalization costs. After 150 days, the patient must pay the entire daily charge.
What is Medicare Part B?
Medicare Part B covers certain services not covered under Part A. This includes doctor visits, out-patient hospital care, physician and occupational therapy and some home-health care. Some of the specific services included are ambulance transportation, artificial limbs, home dialysis, mammography, oral surgery, out-patient psychiatric service, and radiation treatment.
Medicare Part B costs require inflationary consideration as it typically increases each year. Additionally, it should be noted that coverage is only for services and supplies deemed necessary.
What is Medicare Part D?
“Four years ago, U.S. government offered subsidized prescription-drug insurance to 43 million elderly and disabled, the biggest expansion of government backed healthcare in decades,” wrote David Wessel, Wall Street Journal Deputy Bureau Chief in his WSJ.com article “The Lessons of Medical Part D” (01/07/10).
Medicare Part A or Part B beneficiaries are typically eligible for Medicare Part D prescription drug program. This program provides consumer beneficiaries reduced cost savings on prescription drugs.
Private Medical Insurances at Retirement: Medicare Part C and Medigap
It should be noted that private insurance policies under Medicare Advantage plans are sometime called "Medicare Part C." Though regulated by the federal government, these are not under Medicare but are the private insurance options for services typically covered under Medical Part A and B. Medicare benefits under Medicare Part A or Part B are no longer available if private medical insurance is secured by an otherwise eligible beneficiary. Additionally, Medigap is a term used to describe supplemental private medical insurance to cover "gap" services not covered by Part A, Part B, or Part D.
While Medicare does not pay for all health care costs, retirement planning includes applying for Medicare benefits for the significant health care cost reductions it offers and anticipating and calculating premium and deductible costs. Apply for Medicare by contacting a local U.S. Social Security Office.
General Disclaimer: This article is for informational purposes only and should not be used as a substitute for tax or legal advice.
Vanessa Cross - Vanessa Cross is a freelance writer who writes about international trade, business law and small business development issues.
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