Understanding Medicare

The Social Security Administration provides yet another type of benefit for the aged. It's called Medicare, a health insurance plan that covers all medical conditions for people aged 65 and up. You can only receive Medicare if you reached the full retirement age, and eligibility becomes automatic once you reach that age. Most people will be signed up already for Medicare, but people who are receiving social security at an earlier age may have to re-apply for these benefits when they reach their 65th birthday. You will usually receive a notification from the SSA saying that your Medicare benefits will be effective soon, months before you reach 65. Medicare goes hand-in-hand with retirement benefits, and if you have your own private HMO, you can still use your Medicare.

Generally there are two parts of the Medicare program: hospital insurance and medical insurance - aptly called Part A and Part B. Part A will cover costs for hospital care which includes hospital accommodation (ward, room or a hospital facility), meals, nursing services and other hospital services. It can also extend to hospice care and even home health care. This is usually the coverage being given for in-patients.

Part B of Medicare covers medical services such as doctor's fees, medicine, laboratory tests, physical therapy, ambulatory services and other types of medical services given either in-patient or out-patient. You can avail of Part B at the hospital, at the doctor's office, or at any other health care facility.

In the recent years the Medicare program has been amended and extended to suit the preferential needs of old people. When the Balanced Budget Act of 1997 came to effect, beneficiaries can have the option of receiving Medicare coverage thru private HMOs. This is generally called Part C of Medicare (usually termed as "Medicare+Choice"). Medicare beneficiaries availing Part C will be able to get medical saving accounts, managed care plans and other private plans, provided these people pay a monthly premium in addition to their social security taxes.

The last part of Medicare came to effect last Jan. 1, 2006, when the Medical Prescription Drug, Improvement and Modernization Act was passed, allowing beneficiaries to enroll in a stand-alone prescription drug plan (PDP), in which they can choose the drugs they want to cover, and which drugs they can exclude from the coverage. Although the drug prescription plans are provided by private HMOs, these plans are regulated by the Medicare program.