The Two Main Medicare Plans: An Overview

Medicare was introduced and implemented by President Lyndon B Johnson in 1965 as a federal health insurance plan covering hospital and medical care for Americans who are 65 years or older.  The program also covers people who are disabled.  It holds the same offering today, with a number of customized plans serving people with different medical needs and requirements.

The Centers for Medicare & Medicaid Services (CMS), a branch of the Department of Health and Human Services (HHS), runs and monitors the Medicare Program, and the program is funded by two trust funds held by the US Treasury: Hospital Insurance (HI) Trust Fund and Supplementary Medical Insurance (SMI) Trust Fund.  The funds to run the program are procured through payroll taxes paid by employees, employers, and self-employed people; income taxes paid on Social Security benefits; interest earned on the trust fund investments; and premiums paid for Medicare Plans.

With these funds, Medicare offers two main Plans to eligible individuals: Original Medicare (Part A and B), which covers hospital and medical insurance respectively, and Medicare Advantage (Part C), which offers additional benefits in collaboration with private companies.  Currently, Medicare offers six kinds of Advantage Plans, the benefits and costs of which differ from plan to plan, and state to state.

Enrollments with Original Medicare and Medicare Advantage take place in the Initial Enrollment Period, which is the time around the 65th birthday of the eligible individual, and includes the birthday month, 3 months before it, and 3 months after.  The failure to enroll during this period will most likely result in higher premiums as a penalty of late registration.  In the case where eligible individuals are still employed at the time they become eligible, they can sign up for Medicare within eight months of leaving the job or the end of coverage (whichever comes first) to avoid the penalty. All Plans can also be joined or changed during the Medicare Open Enrollment Period lasting from October 15 to December 7 every year.  Enrollment can be done through the official Medicare site, www.medicare.gov, or by contacting an e-TeleQuote Medicare insurance specialist at www.e-telequote.com for consultation on, and enrollment with, health insurance plans.

All Original Medicare and Medicare Advantage beneficiaries qualify for a free wellness doctor’s office visit once every 12 months. Part B beneficiaries also qualify for many preventive care services such as mammograms, cardiovascular screenings, and flu shots.  These services do not have any cost-sharing requirements, but have frequency and referral requirements.  Also, if a medical problem is discovered during a screening, out-of-pocket costs may apply for additional tests, screenings or treatments.

Beneficiaries have to pay an annual deductible to start receiving Medicare benefits.  Most plans will also charge  monthly premiums as service charges.  Premiums can vary from plan to plan depending on the state and  the services offered.

This is not a complete description of the details of Medicare and related plans.  To find out more about the various Medicare insurance options available, you can contact an e-telequote health insurance agent at www.e-telequote.com.

Sources: medicare.gov

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