What Does Medicare Cover? Understanding the 3 Levels

Many people, especially those too young to think they are significantly impacted by Medicare, don't understand it at any worthwhile level of detail. When asked "What does Medicare cover?", they have no idea!

But the truth is that there's much more to understanding Medicare. These details are important for any taxpayer or anyone who is interested in the health of the elderly or disabled.

First of all, it is important to understand that Medicare coverage is not only for the elderly.

There are other types of individuals who are eligible for Medicare coverage. These include individuals who are over the age of 65, disabled individuals, and people who have end-stage renal disease.

The purpose of the Medicare program is to provide health care services for people who are unable to provide health insurance for themselves, either because of their age or their ability. That being said, there are different types of Medicare coverage, and not all of them are free.

Types of Medicare Coverage

There are 4 types of Medicare coverage

There are four different types of Medicare coverage, and only the first is free. They are:

  • Medicare Part A: This Medicare type covers all inpatient charges.

    This includes basically any setting in which the patient is living in the healthcare facility, such as inpatient hospital, nursing home, inpatient psychiatric hospital, hospice, and home health care services.

    This type of Medicare is also free for all eligible individuals.

  • Medicare Part B: This level of Medicare covers all outpatient services, such as doctor's office visits, outpatient hospital services, laboratory services, and medical equipment and supplies, such as wheelchairs.

    This type of Medicare is not free, as it requires eligible individuals to enroll in the program and pay a monthly premium. This type of Medicare also usually only pays 80% of charges, so patients are usually left with paying a portion of their medical expenses.

  • Medicare Part C: This type of Medicare is like being enrolled in a managed health care program, similar to a commercial insurance coverage. It combines Medicare Parts A and B, and is managed by an outside contractor, which is usually a commercial insurance like Humana or Blue Cross/Blue Shield.

    Because it combines different parts of Medicare, there are monthly premiums, and patients are usually left with some portion of the bill that needs to be paid.

  • Medicare Part D: This last type of Medicare coverage is different than all the other three.

    It covers only prescription medications, which are specifically covered by the type of Part D insurance that the patient pays for. The Medicare recipient usually has the option of paying more money for more drug options, or less money for less drug options or more generic brands of pharmaceuticals.

Basically, Medicare offers taxpaying elderly people and the disabled free inpatient hospital coverage, with options to pay more for more different types of health care services such as outpatient care and pharmaceuticals.

But there are drawbacks.


Medicare has lots of coverage restrictions

Because Medicare is financed by taxpayer money, there are many restrictions on what services will or will not be covered.

For example, typical commercial insurance provides for a preventative check up once per year, without leaving anything to the patient's deductible or coinsurance.

Medicare, on the other hand, will only pay for one preventative check up for the Medicare recipient, which has to be done within the first year of coverage. If this examination is not done within the time frame, then the patient will miss out and Medicare will not pay for the exam.

Furthermore, some doctors won't accept Medicare due to its strict nature and restrictions on patient care. This leaves patients with a smaller selection of qualified healthcare providers.

These disadvantages leave some people on fixed incomes unable to pay for the care they need. This is in part due to the fact that the only truly free type of Medicare is Part A, which only pays for inpatient hospital services. If a patient cannot pay for Types B, C, or D, then they will still be responsible for paying for all of their doctor's office visits and any necessary medications.

Another disadvantage of the Medicare system is the current economic situation. Because the Medicare program is funded by the federal government through taxpayer money, it is dependent on a large taxpaying base for funds.

As the ratio of the taxpaying workforce to the elderly gets smaller, Medicare will have an increasingly difficult time covering all the insurance payments it owes.

Hopefully this has provided a brief answer to the question "what does Medicare cover?".

Learn more at medicare.gov and our page on Medicare Part B billing

Contributed by UB 04 Software.

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