3433-vol. 6 issue 2-3.pmd - iarfc

38
Journal of Personal Finance
Medicare coverage consists of several distinct components:
• Part A (hospital insurance) covers hospital services such as bed and
board, nursing services, drugs and injections (while hospitalized),
equipment and medical supplies, inpatient physical therapy, skilled
nursing care and hospice services. Eligibility conditions and
annually adjusted deductibles and co-payments apply. Part A
coverage is premium-free for most Medicare beneficiaries because it
is paid for by payroll taxes collected from employers and people who
are currently working.
• Part B (supplemental medical insurance) includes physician services,
outpatient health care, emergency care, and laboratory services.
Again, there are eligibility conditions and annually adjusted
deductibles and co-payments. Beneficiaries are charged a monthly
premium for Medicare Part B coverage, which is deducted from their
Social Security check or billed quarterly. In 2008, the standard
monthly premium for Part B is $109.40 (higher-income retirees pay
more). People who work past age 65 and have adequate employer
health benefits may decide to postpone enrollment in Part B since
their medical coverage is already provided.
• Part C (Medicare Advantage) provides hospital and medical coverage
through a managed care plan (e.g., health maintenance organizations
and preferred provider organizations). Many provide more
benefits than original Medicare, such as vision and dental services.
Medicare Advantage plans replaced the previous Medicare + Choice
program.
• Part D (prescription drug coverage) is a voluntary outpatient
prescription drug benefit offered by hundreds of private insurance
plans nationwide that meet standards established by Medicare.
Beneficiaries pay a monthly premium, a yearly deductible, and part of
the cost of prescriptions (i.e., co-insurance or co-payments). Part D
coverage was created under the Medicare Modernization Act of
2003. Options include stand-alone plans that provide prescription
drug coverage only and coverage through Medicare Advantage
plans with Part D drug benefits.
Additional information about the Medicare program and Medicare
Part D coverage for prescription drugs can be found at 1-800-MEDICARE, at
the Web sites www.medicare.gov, www.cms.hhs.gov, www.medicarerights.org,
www.aarp.org/bulletin/medicarerx, and www.medicareadvocacy.org, and in
publications from the Centers For Medicare & Medicaid Services (CMS), the
federal government agency responsible for administering the Medicare
program. Another helpful resource to learn more about Medicare and
Medicare Part D prescription drug plans is the State Health Insurance
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