What is Medicare?

What is Medicare?  A basic question.  Or rather, why should anyone care about Medicare?   The reason people should care is that most bankruptcies are medical bankruptcies.  In other words, if you wish to protect your retirement nest egg from bill collectors, Medicare is important to know about.  There are few things that are more disturbing than a pile of medical bills sitting on the kitchen table.  The golden years could be tarnished with worrying about actual or potential medical expenses.  Medicare–if implemented proper–will protect you from a potential catastrophe.  It is critical for people entering into retirement to understand what is Medicare.

What is Medicare?

What is MedicareMedicare is a Federal health insurance program for people who are 65 and older (or on Social Security disability).  It began in 1965 when President Johnson signed it into law.  It was designed to provide medical covered to the elderly at a reasonable price.  In 1965, few people had health coverage once they stopped working.  As a result, many seniors fell into poverty because of burdensome medical expenses.  Medicare was a solution to a national problem.

Medicare Part A

Medicare is divided into two parts: Medicare Part A and Medicare Part B.  Medicare Part A has everything to do with the hospital.  It doesn’t cost anything because you paid for it during your working years.  It was one of the deductions in your payroll taxes.  Medicare Part A covers a 100% of the medical expenses incurred in the hospital, but there is deductible that many people are not aware of.  The Medicare Part A deductible is currently $1,288.  This is NOT an annual deductible.  It is a deductible per benefit period, and a benefit period is 60 days.  So each event has a deductible, and the time for the event is 60 days.  In other words, you could have multiple events and pay multiple deductibles because the event is not limited to just a 60 day period.  Each new event, even if it overlaps with another event, has its own 60 day timeline.  While rare, it could happen, and probably more importantly, you could pay the Part A $1,288 deductible more than once in any given year.

Medicare Part B

Medicare Part B, however, does cost something.  For most people going on Medicare and Social Security in 2016, the Medicare Part B premium is $121.80 per month.  It is generally taken out of your Social Security check.  Medicare Part B covers doctors’ visits and outpatient procedures, such as X-rays, blood work, emergency room visits, etc.  Medicare Part B covers 80% of the cost.  Your portion is 20%.  The 20% coinsurance, however, is unusual.  There is no cap.  There is no maximum out-of-pocket.  Most group plans you were ever on probably had a maximum out-of-pocket.  It may have been $1,000, $2,000, even $10,000, but at some point, you stopped paying and the insurance company covered everything.  Medicare Part B does not have that, so 20% of a big number will be a big number.  You keep paying your 20% coinsurance as long as the bills come in.

These are the basic building blocks to what is Medicare.  You must understand Medicare, Medicare Part A, and Medicare Part B to understand the rest that follows.  In the next blogs and videos, we will cover how to get Medicare, how to cover the Part A deductible, and how to fill the unlimited 20% gap in Part B coverage.

What Our Clients Are Saying About Omaha Insurance Solutions

Walker M.

Chris is the ideal resource for setting up and maintaining Medicare. Knowledgeable, diligent, and relates in a personable fashion.

Stan C.

Having just experienced the Medicare sign-up process, I highly recommend you reach out to Chris for an education on the process. He is a real professional and can provide you with insights into several alternatives.

Dan A.

When I started out I had no idea of what I was doing or how or what I need to best fit my healthcare needs. Christopher Grimmond at Omaha Insurance Solutions provided me a pathway of understanding that took the stress and mystery out of the procedure from start to finish and now into the future with my healthcare needs. I highly recommend anyone and everyone entering the Medicare portal to seek out Omaha Insurance Solutions to ensure that your Medicare needs are being met.
In total Gratitude, Daniel A.