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Medicare - What Is It?

For people age 65 years and older, Medicare is a federal health insurance program. It also covers certain people with a disability or end-stage renal disease. Medicare pays for much of your health expenses, with exceptions for certain costs. These cost include items like certain home nursing care expenses and your out of pocket costs. Out of pocket costs that you must pay, like coinsurance, co-payments, and deductibles, are called “gaps” in original Medicare plan coverage.

Part A and Part B of Medicare

Part A (Hospital Insurance) helps pay for inpatient hospital care, some skilled nursing facility care, hospice care, and some home health care. Your out of pocket with Medicare Part A includes a fairly hefty deductible per benefit period and co-pays for days 61+ in the hospital. The part A benefit period is your stay in the hospital and 60 days after your get out of the hospital. So, you could conceivably have to meet multiple part A deductibles within a calendar year. The co-pays for days 61-90 is $267/day and the co-pays for days 91+ is $512/day. So, as you can see it can get rather expensive if you have multiple hospital stays or extended stays in the hospital.

Part B (Medical Insurance) helps pay for doctors' services, outpatient hospital care, and some other medical services that Part A doesn't cover. Part B helps pay for such covered services and supplies when they are medically necessary. The part B deductible is relatively inexpensive compared to the Part A deductible and is a calendar year deductible. However, once the deductible is met you will be responsible for 20% of your Medicare Part B-related expenses. This can also get rather expensive if you are having to undergo major medical treatment.