Many people use “Health Insurance” as a blanket term, referring to any doctor’s visit, medication, urgent care visit, physical, diagnostic testing, etc. that is paid for or partially paid for by an insurance company. This is true, however, when we talk about Medicare and Medicaid, there is a little more detail that we need to understand.
When you look a little closer to these three terms: Health Insurance, Medicare and Medicaid, you see they are very different. Each has a different type of benefit that is available to different types of people.
Let’s take a look at each, individually, to help give us a better, deeper understanding of exactly what the differences are and when it makes sense to choose “Health Insurance”, “Medicare”, or “Medicaid”.
In the simplest of terms, health insurance is a type of insurance coverage that pays for healthcare services, expenses, medication and treatment incurred by the person who is insured.
Heathcare.gov defines it as: A contract that requires your health insurer to pay some or all of your health care costs in exchange for a premium.
Who is eligible for “Health Insurance”?
Everyone! As a result of the Affordable Care Act, (a.k.a. Obamacare) everyone is eligible for health insurance and has the opportunity to get covered during certain periods of the year or as a result of specific life circumstances.
In the traditional sense, Health Insurance is usually regarded as the insurance coverage you can purchase through The Marketplace, through private providers or it is coverage that is provided by an employer.
But wait…there is more!
Health Insurance is broken down even further, specifically into two categories or branches. They are: Medicare and Medicaid. Medicare and Medicaid service two very specific demographics of American citizens. Let’s look at each a little more closely.
What is Medicare?
Medicare is a Federal health insurance program for specific demographics of the American population. There are 4 parts to Medicare. Medicare Part A, Medicare Part B, Medicare Part C /Supplement and Medicare Part D.
Medicare Part A:
Medicare Part A is hospital insurance coverage which covers the following:
- Inpatient hospital care
- Home health care services
- Care from a skilled nursing facility
- Hospice care
Who is Eligible?
Medicare Part A insurance is available to those American Citizens who:
- Are 65 years old
- Have worked at least 10 years or 40 fiscal quarters
- Paid Medicare taxes during their 10 years or 40 fiscal quarters
- Eligible for social security
- Are disabled and are receiving disability benefits
- Have end-stage renal disease
- Have ALS/Lou Gehrig’s Disease
Once an American reaches the age of 65, they may be automatically enrolled into Medicare Part A. Medicare is primarily available to people over the age of 65 regardless of their annual income.
Medicare Part A begins the first day of the month you turn 65. If your birthday is on the first day of the month, your benefits will begin the month before you turn 65.
Medicare Part B:
There are two types of services that Medicare Part B covers:
- Medically Necessary Services
- Preventative Services
Medically Necessary Services:
These are services and/or supplies that are required to diagnose and treat a medical condition. These services and supplies must meet “accepted standards of medical practice”; medicare.gov
Preventative Services Include:
- Clinical research
- Ambulance services
- Durable medical equipment
- Mental health
- Second opinion before surgery
- Limited outpatient drugs
What Is NOT Covered by Medicare Part A and Medicare Part B:
Medicare does not cover absolutely everything. Some of the things that Medicare does not cover are:
- Long term care
- Dental care
- Vision exams
- Cosmetic surgery
- Hearing aid and fittings
- Routine foot care
Medicare Part C or a Supplement
– Medicare Part C is also know as Medicare Advantage. It is a private plan that is overseen by Medicare. Part C plans vary from provider to provider, but, the common thread is that they must offer something that is equivalent to Medicare Part A and Part B. Medicare Part C plans offer more benefits including vision, dental and hearing. Some also include a prescription drug coverage plan as well. Some say the dis-advantage to the Advantage plans is that you must use the plan’s doctors and service providers in order to be covered.
– Supplements work with Medicare to fill in the gap of whats not paid by Medicare for a covered expense. Original Medicare (parts A and B) are designed to pay for 80% of your medical costs. The supplement pays the remaining 20%. Many people like this type of coverage because you can go to any provider who accepts Medicare and your costs are 100% covered.
Why choose one over the other?…..Cost. Medicare Advantage plans range from $0 to about $100 per month while a supplement can cost from $80 to $230 per month.
Note: When enrolling in a Medicare Part C plan, you are still required to pay your Medicare Part B premium. Each private Medicare Part C plan has different pricing (some even refund your part B premium). Make sure you understand all of the pricing and shop around to get the best plan for your needs.
Medicare Part D
Medicare Part D is the prescription drug portion of your Medicare plan. There are two options here…..
Option 1: Adding the Medicare Part D option as a supplement from an insurance company.
Option 2: Selecting a Medicare Advantage plan that offers prescription drug coverage
What is Medicaid?
Medicaid is a Federally run program for low income American citizens. It is a free or low cost option for those who are eligible.
This coverage is available to eligible Americans including:
- Pregnant Women
- Those with disabilities
Each state designs their own Medicaid programs. Overall, there are some mandatory benefits that must be recognized under Medicaid. Those include:
- Inpatient Hospital Services
- Outpatient Hospital Services
- Early and Periodic Screening, Diagnostic and Treatment Services
- Nursing Facility Services
- Home Health Services
- Physician Services
- Rural Health Clinic Services
- Federally Qualified Health Center Services
- Laboratory and X-Ray Services
- Family Planning
- Nurse Midwife Services
- Certified Pediatric and Family Nurse Practitioner Services
- Freestanding Birth Center Services
- Transportation to Medical Care
- Tabacco Cessation
- Counseling for Pregnant Women
The eligibility for this program varies by state.
There is a lot of information packed into this one blog post. Without a doubt, it has generated questions, specific to your individual situation and the option that is best for you. If you need help in determining your eligibility for Medicare or Medicaid, contact me, Your Obamacare Guy at (813) 391-3448 or dave@YourObamacareGuy.com. It is my pleasure to help people get the coverage they need to live the healthiest life possible!