Medicare is the federal health insurance program for people age 65 and older. It also covers certain people under 65 with disabilities and people with end-stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS).
Most people are eligible for Medicare benefits providing they are a U.S. citizen or legal resident and either they or their spouse has worked at least 10 years in a Medicare-covered job.
There are four major parts of Medicare:
Part A covers inpatient hospital stays, as well as care in a skilled nursing facility, hospice care and some home health care.
Part B is medical insurance covering doctors’ services, outpatient care, medical supplies and preventive services.
Part C is better known as Medicare Advantage Plans. Those are health plans offered by private companies that contract with Medicare and provide both Part A and Part B benefits through health maintenance organizations (HMOs), preferred provider organizations (PPOs), private fee-for-service plans, special needs plans and Medicare medical savings account plans.
Many Medicare Advantage Plans offer prescription drug coverage. For those not receiving prescription drug coverage through Part C, Medicare Part D was introduced a decade ago and went into effect in 2006. Part D adds prescription drug coverage to original Medicare and some Medicare Advantage Plans.
People who choose original Medicare (Parts A and B) can also elect to purchase Medicare supplement insurance, commonly referred to as Medigap. Medigap helps pay for some of the health care costs not covered by Medicare, including some co-payments, coinsurance and deductibles.
The Medicare “Donut Hole”
The “donut hole” is the term used to describe the gap in prescription drug coverage under Medicare Part D.
In 2013, enrollees had to pay 47.5% of the cost of brand name drugs and 79% for generic drugs after reaching $2,970 in total drug costs for the year and before catastrophic coverage kicked in at $4,750.
Under provisions of the Affordable Care Act, that gap will decrease each year until 2020, when enrollees will have to pay no more than 25% of the cost of drugs at any point after reaching the deductible.
What caregivers need to know about Medicare
Medicare gives users a variety of options, but selecting the right plans can be a daunting task. Help is available through the Serving the Health Information Needs of Everyone (SHINE) Program, which provides free health insurance information, assistance and counseling to Massachusetts residents. SHINE counselors are available through town Councils on Aging and other community-based agencies.
Medicare is not free, and costs can include monthly premiums, deductibles, coinsurance or copayments and costs incurred after exceeding certain Medicare benefit limits.
There is help to cover some of those costs if you meet certain eligibility requirements. Those eligible for MassHealth can have premiums, deductibles and coinsurance covered by MassHealth Standard.
There are also Medicare Savings Programs here to help low-income enrollees. In Massachusetts, these programs are called MassHealth Medicare Buy-In [PDF] programs, and include the Qualified Medicare Beneficiary (QMB) Program, Buy-In for Specified Low-Income Medicare Beneficiaries (SLMB) and Buy-In for Qualifying Individuals (QI).