Medicare is federal health insurance for people who are age 65 or older, as well as younger people with certain disabilities and illnesses. Understanding Medicare basics isn’t as difficult as it first appears, but the program does have several different elements that require explanation. If you need help check out AGIS’ checklist on selecting a Medicare Plan.

When they turn 65, most Americans automatically start receiving what is known as Original Medicare, which consists of Medicare Part A and Part B. Original Medicare usually covers 80 percent of the approved amount charged by a physician or facility.

Medicare Part A, which is free for most recipients, helps pay for inpatient hospital care, skilled nursing facility care after a hospital stay, hospice care, and some home healthcare. Part B, which usually requires a monthly premium, helps pay for doctor’s services, outpatient hospital care, and some other medically necessary services. Part B is optional; your loved one may not need it if he or she already receives benefits from an employer or union.

To help pay for prescription drugs, anyone who qualifies for Medicare can choose a Medicare Prescription Drug Coverage plan (also known as Medicare Part D). Provided by private companies, these plans can charge different premiums, cover different drugs, and offer different benefits as long as the overall value matches Medicare’s standard benefit. For people with low incomes, several other programs can help pay for prescription drugs.

There are many services, however, that are not covered by Medicare, such as Long term care, home health agencies and assisted living facilities. Medicare pays only for medically necessary skilled nursing facility or home health care. According to the Medicare website, “Custodial care (non-skilled care) is care that helps you with activities of daily living.”

Suzanne Mirtz, president and co-founder of the National Family Caregivers Association, pointed out in her interview with NPR’s Fresh Air, “Medicare does not pay for ongoing home care. They actually call it custodial care which I think is extremely pejorative - we’re not custodians.”

The overwhelming costs of services related to long-term care burdens many Americans who mistakenly thought Medicare would help cover their needs. Instead, many elderly citizens need to supplement their insurance under Medicare with Medicaid or private insurances. By buying Long Term Care insurance and paying a fixed monthly premium before the need for care is imminent, you can greatly reduce the cost. Premiums, which are based in part on the age and medical condition of the applicant, are much lower for those who sign up in their forties, fifties or sixties than for those who wait. Planning for such large costs can be overwhelming - as well as knowing which insurance to buy, but with AGIS’ help you can ensure you and your loved ones are prepared.

Filed under: Long Term Care, Medicare, Medicare & Medicaid