Each year, over 55 million people benefit from Medicare coverage in the United States. This national healthcare program was launched in 1965 as a social security program. Medicare primarily targets adults over 65, the disabled, and those on dialysis treatment. The program is available anywhere in the United States and is administered by local Medicare centers and Medicaid agencies.
Let's explore the options available after becoming eligible for the Medicare insurance Programs. You'll discover the top factors to consider when selecting a Medicare plan for you and your family.
Medicare options
When signing up for the Federal Medicare Program, you can choose between Original Medicare and Medicare Advantage.
The Original Medicare covers the following:
- Part A caters to inpatient hospitalization and professional nursing facility services
- Part B caters to doctor visits, clinical services, and preventive healthcare services
Enrolment eligibility
You automatically qualify for the Medicare Part A and Part B schemes if you are over 65 years old and are already receiving social security benefits or similar disbursements from the Railroad Retirement Board. You don't need to fill out any forms or meet any other criteria to enroll for Medicaid services. You will receive your Medicaid services card at least three months before turning 65.
Medicare Advantage, also known as Part C, offers all the services in Part A and B under the Original Medicare with additional plans for dental healthcare. Medicare Advantage programs are offered mainly by private medical insurers, each with its unique cost-sharing model. These plans are quite popular because they offer flex cards for seniors.
Top factors to consider when enrolling in Medicare coverage
1. The coverage cost
Under Medicare programs, the insured incurs monthly premiums and other deductibles to keep the program alive. It's important to consider how much you'll pay in premiums and other deductibles to ensure the coverage falls within your budget. You'll need to compare the opportunity costs of enrolling in the program versus paying for doctor visits whenever they arise.
It also helps to consider whether there are yearly limits on how much you can incur out of pocket for health services. The Original Medicare Plan sets no limit for out-of-pocket expenses unless there's additional coverage. Though costly, the Medicare Advantage includes a yearly cap on out-of-pocket expenses, meaning you'll not have to pay medical services after surpassing the annual limit.
2. Supplemental coverage
Some people may already have private medical insurance schemes before becoming eligible for Medicare services. In such situations, it's essential to understand how these two coverages overlap to best serve your health and financial interests.
If you are already insured under an employment scheme, it helps to get advice from your insurer or benefits administrator before switching to the Medicare insurance plan.
3. Choosing the right prescription drug coverage
Commonly known as Medicare Part D, prescription drug insurance is available as an add-on for those who opt for the Original Medicare. You'll have to pay extra premiums to join the Part D program.
If you're on the Medicare Advantage Plan, it's possible that your prescription drug coverage is already included in the insurance package. If you are torn between choosing a separate Part D coverage or a prescription coverage under the Medicare Advantage, you will need to understand the following details.
- Are there penalties for enrolling for the prescription package later?
- How much will you pay for prescription drugs under each coverage?
- Which drugs are offered under the prescription drug formulary?
4. Doctor and hospital preference
If you prefer to continue working with your family doctor, it's essential to consider whether your preferred doctor accepts Medicare coverage. If your doctor or preferred hospital doesn't include Medicare plans, you may have to select a healthcare provider within your network.
If you are signing up for the Original Medicare Plan, you are free to choose any hospital that accepts the coverage. For the Medicare Advantage Plan, you'll need to confirm which pharmacies and clinicians are most accessible from your home.
5. Healthcare quality
The quality of healthcare may vary depending on the type of plan and the health institution you opt for at the time of enrolment. Look out for the following items when comparing healthcare providers in your network.
- Review the quality ratings of clinics and nursing homes in your area.
- Compare the coverage costs for all doctors qualified to offer Medicare services in your network.
- Ensure the chosen provider has sufficient inpatient rehabilitation facilities and dialysis services for those on dialysis treatment.
6. Coverage for overseas travel
Suppose you are traveling within the territories of the United States and are on the Original Medicare Plan; you can access Medicare services from any clinic, doctor, or healthcare institution that offers the coverage. If you're on the Medicare Advantage Plan, your coverage options will depend on the doctors or clinics within your network.
Unfortunately, the Original Medicare Plan doesn't offer medical insurance when traveling beyond United States borders. This means you'll bear the cost of treatment should you need any care during your overseas trip. However, people on Medicare Advantage may enjoy emergency coverage when traveling abroad.
Aidan has been writing about personal finance for over 6 years. Prior to this, he worked as a Corporate Finance Analyst where he specialized in Due Diligence, Company Valuations and more. He is a CFA charterholder.
