What Are The Parts Of Medicare?
the parts of medicare are:
medicare part a - hospital insurance
medicare part b - medical insurance
parts a & b together are called original medicare.
medicare parts c & d are called medicare "supplemental" insurance.
you can enroll in parts c & d at any time.
you can enroll in part a & b when you are 65.
you can enroll in parts a & b or parts c & d, but not both.
part d is optional.
what is part a?
part a covers inpatient hospital services.
it also pays for some skilled nursing facility services.
people who are eligible for part a have the following 3 options:
1. the traditional hospital length of stay (70 days)
2. the outpatient hospital benefit (20 days)
3. a limited benefit option (40 days if you are in a skilled nursing facility
and 80 days if you are not in a skilled nursing facility).
the amount paid under part a is based on the cost of care at the facility.
what is part b?
part b covers the costs of medically necessary health care services
you receive in doctors' offices and other settings.
it also pays 80% of the approved amount for some
outpatient hospital services.
people who are eligible for part b have the following options:
1. full benefit
2. a limited benefit option (20 days in a skilled nursing facility)
3. a "limited pay" option (40 days per year, unless you are in a skilled nursing
facility).
the amount paid under part b is a set amount each month.
part b premiums are deducted from your social security benefit.
what is part c?
part c is an optional program that pays most of your costs for
medicare approved health insurance.
the insurance plans have a medicare advantage organization
(mao) which is a group of providers.
you can choose from a range of plans, including plans with
preferred network providers and plans with more extensive
provider networks.
what is part d?
part d is an optional program that pays part of your costs for
prescription drugs.
you can choose from a range of plans, including plans that
have preferred networks of pharmacies.
these plans are administered by private sector companies
and by groups of health care professionals.
what is the medicare trust fund?
the medicare trust fund is a federal fund established by the
congress in 1997.
the fund has been set up in anticipation of the time when
part b and part d will begin to cost more than the amount being
paid into the trust fund.
so far, the trust fund has not had to be used.
why does medicare have a trust fund?
the trust fund is a savings account for medicare.
it is a way to pay for people who are currently in the program
and for people who are about to join the program.
the trust fund is holding money the government received for
the purpose of paying for future medicare costs.
as the money in the trust fund grows it is invested in U.S.
Treasury bonds which pay interest.
the interest is used to pay for the current and future medicare
costs.
the trust fund is in the federal budget under the heading
"Medicare."
how does the trust fund get more money?
the government collects money for medicare through social security
taxes.
something called the "surtax" is also collected.
this surtax is only collected on the income above a certain level.
for the year 2005, the surtax is 1.45% of the amount of income
over $87,900.
the government adds any money it gets from the surtax to the
trust fund.
the government also takes money out of the trust fund to help
pay for the cost of running the program.
in 2004, the government took out almost $45 billion dollars to
pay for medicare benefits.
what does the government do with the money that is in the trust
fund?
the government takes money out of the trust fund to pay for
medicare costs.
it also uses money in the trust fund to help pay for social security.
social security is a program that pays benefits to people who
are retired or disabled.
social security in the same way that it takes money out of
social security to pay for medicare.
what happens if there isn't enough money in the trust fund?
if the trust fund is used up, then the government will have to use
money from general revenues to pay for future medicare costs.
generally, this will mean higher taxes to pay for medicare.
what is the average total cost of a hospital stay?
for 2005 the average total cost of a hospital stay is $9,859.
Source: Kaiser Family Foundation
what is the average cost of prescription drugs?
for 2005 the average cost of prescription drugs is $399.
