The U.S. faces a growing elderly population with increasing medical needs and worrisome long-term care costs. As a physician for primarily geriatric (persons over 65) and complex patients, the questions I hear frequently involve Medicare. Understandably, the questions are usually about what their insurance covers, and these are the common topics:
Medicare is available at 65; the cost is lowest if the person or their spouse has worked full-time for at least 10 years. It is important to enroll in Medicare on time for, unlike Social Security, when a person reaches eligibility but enrolls late, they incur increased monthly Medicare penalties for a lifetime. You read that correctly: if you enroll in Medicare late, you will pay for that delay the rest of your life. Apparently it is that important the government control your healthcare.
Medicare is broken into parts A, B C and D.
Part A is excellent hospitalization coverage, which most people understand. Everyone under part A has a deductible every year. Most people do not understand this.
Part B pays for roughly 80% of outpatient healthcare after annual deductible; 20% of outpatient costs are the patient responsibility.
Also misunderstood: emergency room, same-day surgery and observation status are only covered by Part B; Medicare regulation states it is not hospitalization. Roughly one-third of what laypersons consider “hospitalization” is not – it is “observation”, so the patient gets billed at least 20% of those charges.
Part C is optional – called Medicare Advantage it has more coverage flexibility conforming to individual needs and can wrap parts A, B and D into one plan. The overall coverage for Medicare Advantage is not only more comprehensive than traditional Medicare; but also can reduce the need for “medi-gap” insurance (supplemental plans addressing the 20% of uncovered cost mentioned above).
Part D is prescription drug coverage, an excellent financial deal for patients on chronic medication.