The Medicare program is highly confusing and complex.  Here are some Medicare basics to get you started.

Medical Entitlement Program

Medicare is a federal government entitlement program, providing health care coverage for people 65 years of age or older or those with a permanent disability.  “Entitlement” means that there are no financial or other qualifications other than age or disability.

Who’s in Charge of Medicare?

The U.S. Department of Health and Human Services runs the Medicare program through regional Centers for Medicare and Medicaid Services (“CMS.”)

Medicare’s Purpose

Medicare was designed to cost share basic medical coverage for the treatment of illness and injury.  It was designed in 1965 before there were today’s medical advances and expensive treatments.  At that time, Medicare paying 80% and a patient paying 20% of a bill was reasonable.  That has changed.

Medicare Supplements

Medicare supplements have been designed to cover the patient’s 20% responsibility.

Current Parts of Medicare System

Part A:  Hospital care

Part B:  Medical care not covered by part A

Medigap:  Supplemental insurance for Medicare Parts A and B

Part C:  Alternative coverage plans

Part D:  Prescription drug plans

What Medicare Part A Covers

• Hospital
• Skilled nursing facility
• Psychiatric institute
• Home health care
• Hospice

Medicare Part B Covers

• Doctor visits
• Therapies (physical, speech, and occupational)
• Outpatient services
• Diagnostics
• Home health care
• Durable medical equipment
• Ambulance services

Medicare Does Not Cover

• Hearing aids
• Most eye care, glasses, and contacts
• Most dental care
• Most routine foot care

The Costs of Medicare

• Monthly premiums
• Annual deductible
• Coinsurance payments

Medicare Part A Premiums (2011 fees)

• Free if you (or your spouse) have worked 40 quarters
• $248/monthly if you (or your spouse) have worked between 30 -39 quarters
• $450/monthly if you (or your spouse) have worked less than 30 quarters

Medicare Part B Premiums (2011 fees)

• Based upon your income and range from $115.40/monthly to $369.10/monthly.

If you have questions about applying for Medicare and Medicare coverage, consult with a qualified estate planning attorney.

Ryan, Hicks, Cumpton & Cumpton LLP is a member of the American Academy of Estate Planning Attorneys.