Medicare health insurance is a program that is federally administered and is made available to people with certain specific forms of disability, permanent kidney failure, or people who are 65 years of age or older.
There are several different types of Medicare plans, the basics of which are as follows:
• Medicare Part A – provides coverage for hospital care (among institutions that accept Medicare) and has no monthly premium for its beneficiaries, as long as they have been employed and have paid FICA taxes for a minimum of a decade. The deductible for this plan is $1,132 per benefit period, which begins when the beneficiary is admitted to the hospital. This period restarts when the beneficiary has been out of the hospital for 60 days.
• Medicare Part B – provides coverage for care received from health care professionals such as doctors (who accept Medicare). The monthly premium is automatically removed from the Social Security check of the beneficiary. Seniors new to the program typically pay $115.40 in monthly premiums, but the majority of existing senior beneficiaries pay $96.40 as Social Security has not increased for cost of living in a number of years. The annual deductible is $162.
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Together, Medicare Parts A and B are called Original Medicare. Individuals covered by it must pay 20 percent of their medical costs unless they purchase a Medigap policy (supplementary private insurance) in order to cover co-insurance, co-payments, and deductibles. Among the ten standardized Medigap plans, the most popular is Plan F, which has premiums ranging from $80 to $177, depending on the ZIP code, age, and gender of the beneficiary. There are no deductibles.
• Medicare Part D – provides coverage for prescription drugs by way of private insurance companies for a monthly premium starting at $15.10.
• Medicare Advantage (Part C) – this coverage may include Medicare Part D. It is offered to individuals living in metropolitan areas in order to help keep their medical costs down as opposed to purchasing a supplemental insurance.