What is Medicare insurance?

Medicare is one of the health insurances provided by the federal health insurance programs especially for elderly people who are 65 years old and above, young people with disabilities, and people affected with end-stage renal disease. The Medicare program covers medical services, nursing facilities, home health care, physician services, prescription drug, and hospital health care. Most of the population is getting benefited from the Medicare insurance program.

Objectives of Medicare

The main objective of a Medicare benefit is to provide national coverage for health.

• Usually, after 65 most people retire from the workplace. Traditional health insurance will end after the retirement of the individual. Medicare gives health coverage to cover the cost of prescription drugs and provide lifetime health care.
• For people with disabilities and end-stage renal disease will be unable to work due to their health issues. Employer health insurance or medical insurance will not cover their cost. Hence Medicare supports such people’s health conditions and gives care and services through insurance.

Eligibility

• An individual whose age is 65 or above 65 will be eligible for a Medicare benefit if any one of the following conditions are fulfilled
  • An individual who should have worked for at least 10 years and paid FICA tax is eligible for Medicare enrollment.
  • The individual’s spouse should have worked for at least 10 years in Medicare-covered employment.  
• An individual having a medical condition that meets the disability definition of social security and his/her condition expected to last for at least 12 months is eligible for enrollment in Medicare. When an individual receives disability benefits from social security or railroad retirement boards for 24 months are also eligible for enrollment in a Medicare benefit.
• An individual is eligible for enrollment in Medicare if he/she has to do regular dialysis or kidney transplant that falls under end-stage renal disease. Individuals should have got approval from the social security or railroad retirement board for applying for a Medicare benefit.

Types of Medicare plans

The Medicare program is parted into four that give coverage for different health care events. They are part A, part B, part C, and part D Medicare plans.

Part A Medicare

Part A Medicare provides coverage for inpatient hospital costs when a person is admitted to the hospital. It also covers the cost of a walker, wheelchairs, hospital care, home healthcare services, surgeries, and blood transfusions which helps to recover from current health conditions. Limited coverage for the nursing facilities is also covered by part A Medicare when a person is admitted in the hospital for three days by doctor's order resulting in formal inpatient admission. Here premiums are calculated depending on income earned by the person.

Part B Medicare

Part B Medicare provides coverage for the service of doctors, preventive health care, and medical supplies. Normally, most people have both part A and part B Medicare coverage together to utilize the benefits for improving their health. Part B Medicare covers the cost of many tests and services such as screening tests for diabetes, depression, & cancer, ambulance services, and emergency services for the betterment of health. It also extends coverage for vaccinations like hepatitis and influenza and medical equipment supplies for diagnosing a medical condition, etc. Depending on the income premium is calculated, any service out of Medicare coverage will be paid by the person out-of-pocket.

Part C Medicare

Part C Medicare benefit is private insurance sold by the insurance companies. It offers the same coverage provided by part A and part B Medicare. Part C Medicare is otherwise known as a medical advantage and gives extra coverage for dental, hearing, vision, prescription drug plans, and other services. It also offers additional benefits like gym memberships, meal delivery services after discharge from the hospital, emergency room care, therapy, image testing, medical equipment, and laboratory testing, etc. Premium is paid monthly and deduction is also available in this part C benefit.

Part D Medicare

Part D Medicare benefit is a prescription drug coverage offered by private insurance companies. Its coverage ranges for different varieties of prescription drugs based on the chosen plan. Part D Medicare works when the insurer has enrolled in the Original Medicare along with the Medicare advantage plan. Certain drugs are covered by the plan called a formulary. A prescription drug that does not fall under the formulary list will be paid out-of-pocket. Drugs like antidepressants, antipsychotics, anticonvulsive, anticancer, HIV, and AIDS are covered by part D Medicare. It also covers many vaccines, but not the vaccines covered by a part B Medicare benefit.

Advantages of Medicare

Coverage for elders and disabled

Medicare is a health insurance plan that provides hospital and medical insurance for millions of people in America. Senior citizens and disabled people are highly benefited from this health program. It is affordable and reduces the burden for many people.

Wild coverage

A Medicare benefit covers a different variety of benefits for inpatient and outpatient. Medical equipment, health screenings, preventive health measures, and surgeries are included in the Medicare plan.

Low premium

Most people have the privilege of not paying premiums for a part A Medicare benefit. As for part B Medicare benefits, the standard monthly premium is $148 per month.  

Disadvantages of Medicare benefit

Limited coverage

Single Medicare does not cover all health issues under one plan. Some important health care needs are not covered under a single plan like a prescription drug, routine dental care, eye care, and hearing care.

High Cost

Enrollment in Medicare seems to be costly and it runs in thousands for hospital stays. Some people experienced unnecessary hospitalization. Most people fall under low-income groups thus they cannot afford a meaningless stay in hospital.

Non-acceptance

Some health care providers do not accept Medicare for prescription drugs, surgery, and health care treatment. When it comes to the private Medicare plan there are only limited health care providers. It becomes a minimal choice for the beneficiary according to the benefit plan.

Context and Applications

This topic would be helpful in exam preparation for undergraduate and postgraduate courses such as:

• Certificate in Insurance Management
• Certificate in Insurance Management
• Diploma in Business Insurance
• Attestation of Collegial Studies – Insurance and Financial Services
• Bachelor of Commerce in Risk Management Insurance and Finance
• Bachelor of Science in Business Administration – Risk Management and Insurance
• Master of Science in Finance Risk Management – Risk Management and Insurance
• Master of Business Administration Risk Management and Insurance

Practice Problems

Question 1: The Medicare benefit has ___________ types.

1) Four

2) Two

3) Seven

Answer: Option 1 is correct.

Explanation: Medicare benefit has four types of plans they are part A, part B, part C, and part D. Part A cover hospital inpatient medical expenses, part B covers the outpatient medical expense, part C is a private insurance plan that provides both part A & part B, and part D cover the prescription drug.

Question 2: Part C Medicare plan gives coverage for ________________.

1) Dance

2) Dental, vision, and hearing

3) Aerobics

Answer: Option 2 is correct.

Explanation: Private insurance companies offer part C benefit along with the same coverage as part A Medicare benefit and part B Medicare benefit. Part C Medicare benefit covers the cost of service of dental, vision, hearing, and other services.

Question 3: Who can be eligible for Medicare benefit enrollment from the following?

1) An individual whose age is 30 years old.

2) An individual whose age is 65 years old.

3) An individual whose age is 55 years old.

Answer: Option 2 is correct.

Explanation: For the enrollment in Medicare benefit one has to be attained the age of 65 years old or more. He should apply for Medicare within 3 months of attaining the age of 65.

Question 4: Enrollment in part D Medicare is mainly for ___________.

1) Prescription drug

2) Surgeries

3) wheelchairs

 Answer: Option 1 is correct.

Explanation:  Part D Medicare benefit plan is issued by a private insurance company where it is created for covering the cost of prescription drugs. A list of drugs is given for coverage, drugs that fall under the list will be covered.

Question 5: Medicare insurance is established for _________.

1) All citizens and disabled people

2) Sportspersons

3) Senior citizens aged above 65 and disabled people

Answer: Option 3 is correct.

Explanation: Elderly people and disabled people will not go to work due to old age, retirement, and health issues. To cover their medical expenses, Medicare is introduced to support their healthy life after retirement and disability.