What is Medicare and How Does it Work

What is Medicare anyway,
and how does it work? What does it cover, and is
Medicare actually insurance? Though these may seem
like simple questions, the answers of course
are more complex. However, you’ve come
to the right place for Medicare information. Hi, there. If we haven’t met yet, I’m
Danielle Kunkle Roberts, co-founder here
at Boomer Benefits and a member of the
Forbes Finance Council. In this video, we’ll
define what Medicare is and explain how it’s
different from Medicaid. We’ll also give you
a brief explanation for the four parts of Medicare. Stay tuned to find out how you
can sign up for our free six day Medicare email
mini course, which comes with our new to Medicare
checklist and a bonus worksheet to help you calculate your
potential costs for Medicare. And don’t forget to hit that
subscribe button so that you’ll always be notified
when we release a new video about Medicare
here on our YouTube channel. [MUSIC PLAYING] Let’s define Medicare coverage. Medicare is a national United
States health insurance program for people aged 65 and older. It is also for people
with certain disabilities, illnesses, or end
stage renal failure. The Medicare program’s coverage
is divided into various parts and it’s important to learn
how these parts fit together. Part A is your
hospital insurance. And this assists you with
the cost of inpatient care and skilled nursing. It also helps with things like
hospital and home health care services in the hospital. In general, you should think
of the inpatient hospital benefit as Medicare coverage for
room and board in the hospital. It covers the costs of a
semi private room and doctor and nurses that come
to check on you. The cost of Part A for most
people at age 65 is zero. This is because you’ve
paid taxes toward it during your working years. If you don’t
automatically qualify for premium free coverage,
you can pay for Part A, although it will cost
you a hefty premium. Medicare Part B is your
outpatient medical coverage. And Part B covers essentially
all of your other coverage that happens outside
of inpatient hospital and skilled nursing. Without Part B, you would be
uninsured for doctor visits, lab work, diagnostic testing. You would also not
have Medicare coverage for preventive services,
outpatient surgeries, ambulance and emergency care. More importantly, Part
B covers cancer therapy and kidney dialysis. These are really expensive
and would cost you a fortune without supplemental coverage. The cost of Part B is
set by Social Security and it changes
from year to year. Individuals in higher
income brackets pay more than those
in lower brackets. How much you will pay
will be determined by your modified
adjusted gross income that you report to the IRS. You can read more about the cost
of Part B on our Medicare Cost page on the Boomer
Benefits website. Moving on to Part C. We define
Part C as a Medicare Advantage program or private
insurance that provides the same
services as parts A and B, and usually includes
Part D as well. The cost of advantage
plans vary by carrier, county of residence,
and the plan selected. Now, to enroll in
a Part C plan, you must first be enrolled
in both parts A and B. Even if you find a Part C
plan with a very low premium, you will still pay for
Part B. You must also live in the plan’s service area. Once you enroll, your
Medicare coverage will come from the Medicare
Advantage plan itself and not from the government. Now, the reason you don’t
enroll in Part C at the Social Security office is that
Part C is optional. Many people prefer to get
their Medicare coverage from original Medicare and
a traditional Medigap plan. These people do not want
a Part C advantage plan, so they simply
don’t enroll in one. It’s your choice whether you
wish to opt for one as opposed to just staying with your
original Medicare A and B and enrolling in a Medigap plan. Check out our video here on
YouTube about the pros and cons of Medicare Advantage plans. This will really help you
understand the difference. Finally, Part D is the newest
part of our national health insurance program. For half a century there
was no Medicare coverage for outpatient
prescription medicines. But in 2006, our federal
government rolled out Part D. Now, Part D covers
outpatient retail drugs that you yourself pick up
or order via mail order. You will choose an
insurance carrier and enroll in their drug plan. And that’s how you
sign up for Part D. Most states have about 20 to
30 drug plans to choose from. And so the best way to
determine which one is right for you is to have your Boomer
Benefits agent run a Part D analysis using Medicare’s
prescription drug finder tool, which can be
found at medicare.gov. Now, what’s the difference
between Medicare and Medicaid? This is a super common question
that we get around here at Boomer Benefits. By definition, Medicare is
a health insurance program for the elderly. Medicaid, on the other hand, is
a financial and/or health care assistance plan for
low income individuals. Some people who have
very low incomes have both Medicare and Medicaid. When they have both,
Medicare is primary and Medicaid is secondary. Medicaid helps to pay for some
of the expenses not covered by Medicare, such as
deductibles and coinsurance. Depending on your level
of Medicaid coverage, you can also qualify
for assistance with your Part B premiums. Do you need help
understanding what Medicare is and how it works? If so, don’t hesitate to drop
your questions in the comments below, and we will answer. Don’t forget to sign
up for our six day Medicare email mini
course so that you can get our free new
to Medicare checklist with a bonus worksheet
that will help you to determine your
estimated cost for Medicare. Thanks for watching, and we’ll
see you in the next video. [MUSIC PLAYING]

1 comment

  1. Do you have a question about how Medicare works? Let us know here in the comments and we'll be happy to answer. You can sign up for our Medicare mini-course here: http://boomerbenefits.link/mini-course

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