More than 50 years ago, the federal government established programs designed to help Americans afford healthcare services called Medicare and Medicaid. Since both of these programs involve many variables, they require some study. To provide insight into how the coverage works, here are some facts you might not know about Medicare:
Medicare and Medicaid Provide Most of the Same Services
That’s true for some people. Medicare is for persons 65 and older or with other qualifying conditions, while Medicaid is for lower-income Americans based on financial need.
Medicare Coverage has Four Parts
• Part A covers inpatient stays in hospitals, skilled nursing facilities, hospice facilities and sometimes, home-based healthcare services.
• Part B covers doctor visits, durable medical equipment, home health services and qualified preventive services. Parts A & B are sometimes called “Original Medicare.”
• Part C (Medicare Advantage plans) combines Part A, Part B and usually prescription drug coverage from private insurers.
• Part D covers outpatient prescription drug coverage from private insurers. You must be enrolled in Part A or Part B to receive Part D coverage.
Medicare is Not Free for Most of Us
While Part A comes with no monthly premium if you have a 10-year history of paying Medicare taxes, unless you qualify for assistance, you will be responsible for deductibles and coinsurance costs. For example, the deductible for 2016 is $1,288 for each benefit period and coinsurance varies with the length of the hospital stay. The part B premium is $121.80 but most persons only pay $104.90. Beneficiaries with incomes that exceed specific thresholds may pay more.
With Original Medicare, There are No Networks to Worry About
You’re free to go to any doctor or hospital that accepts Medicare, even outside of your home state.
You May Need Supplemental Insurance in Addition to Medicare
There are limitations to Medicare coverage, therefore, you may need additional coverage depending on your current or future health needs. Carefully review what each part covers before enrolling and ask other insurance providers how their coverage complements Medicare.
The federal government and most states provide resources to help you understand your options and guide you through the Medicare enrollment process. Be prepared — start learning more today, so you’re ready when you become eligible for Medicare coverage.
MICHAEL W. K. YEE, CFP
1585 Kapiolani Blvd., Ste. 1100, Honolulu HI 96814
808-952-1222, ext. 1240 | michael.w.yee@ampf.com
Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC®, is a Financial Advisor,
Certified Financial Planner ™ practitioner with Ameriprise Financial Services Inc. in Honolulu, Hawai‘i, with Na Ho’okele Financial Advisory Team, a financial advisory practice of Ameriprise Financial Services Inc. He offers fee-based financial planning and asset management strategies and has been in practice for 29 years.
Investment advisory products and services are made available through
Ameriprise Financial Services Inc., a registered investment adviser.
Ameriprise Financial Services Inc. Member FINRA and SIPC
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